Canadian housing starts rebounded 14.2 percent to a seasonally adjusted annual rate of 279,234 in September from a downwardly revised 244,543 in August, topping even the highest estimate of 260,000 in an Econoday survey of forecasters.

The six-month trend increased 4.1 percent to an annual rate of 277,147, led by significantly higher monthly starts in Ontario, notably Toronto, Québec, notably Montreal. The two cities accounted for more than a quarter of the total monthly starts nationally. CMHC cited higher rental apartments starts.

While these results indicate some resilience, it is worth noting that current housing starts levels are generally reflective of decisions made months or even years ago when investor confidence was higher than it is today, CMHC Deputy Chief Economist Tania Bourassa-Ochoa warned.

In fact, Canada Mortgage and Housing Corporation expects the housing market to cool further in 2025 before it gets better in 2026, assuming trade tensions ease and economic conditions improve.

In September, while the Canadian economy added 60,400 jobs in September, construction employment actually contracted 8,200.

Starts expected essentially flat from 246K in August.

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.