Housing starts rebounded by 16 percent in July to a seasonally adjusted annual rate of 279,509 from a slightly revised 241,643 in June. The July figure topped Econoday's consensus expectation of 245,000.

The six-month trend for total housing starts rose 3.2 percent to 255,783 in July from 247,840 units in June. The trend measure is a six-month moving average of the SAAR of total housing starts for all areas in Canada.

For urban areas with population of 10,000 or more, housing starts rose 17 percent in July from June to an annualized 261,134. Multi-unit urban starts surged by 21 percent in July from June to an annualized 217,306 units.

Housing starts are expected to rise slightly to a 245,000 annual rate in July versus June's 241,672.

Released by the Canada Mortgage and Housing Corporation (CMHC), the monthly housing starts data capture the annualised number of new residential buildings that began construction during the previous month. Statistics are provided for urban and rural areas, the former with a population of at least 10,000. CMHC estimates the level of starts in centres with a population of less than 10,000 for each of the three months of the quarter, at the beginning of each quarter. During the last month of the quarter, a survey of these centres is conducted and the estimate revised.

Housing starts are a leading indicator of economic health because building construction produces a wide-reaching ripple effect. This narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. Home builders usually don't start a house unless they are fairly confident it will sell upon or before its completion. Changes in the rate of housing starts tell us a lot about demand for homes and the outlook for the construction industry. Furthermore, each time a new home is started, construction employment rises, and income will be pumped back into the economy.

Once the home is sold, it generates revenues for the home builder and a myriad of consumption opportunities for the buyer. Refrigerators, washers and dryers, furniture, and landscaping are just a few things new home buyers might spend money on, so the economic"ripple effect" can be substantial. Since the economic backdrop is the most pervasive influence on financial markets, housing starts have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the housing starts data carry valuable clues for the stocks of home builders, mortgage lenders, and home furnishings companies. Commodity prices such as lumber are also very sensitive to housing industry trends.