| Consensus | Consensus Range | Actual | Previous | Revised | |
| Annual Rate | 265,000 | 255,000 to 285,000 | 238,049 | 282,439 | 280,668 |
Highlights
Canadian housing starts fell 15.2 percent to a seasonally adjusted annual rate of 238,049 in January that was below even the lowest expectation of 255,000 in an Econoday survey of forecasters. December's estimate was revised down to 280,668 from 282,439.
The six-month trend decreased 3.5 percent in January to 254,794, marking its fourth consecutive decline.
Actual starts in centres with a population of 10,000 or more were up 0.8 percent year-over-year.
Looking ahead, Canada Mortgage and Housing Corporation (CMHC) expects GDP growth to slow to 0.7 percent in 2026, below the Bank of Canada's 1.1 percent projection. Under this baseline scenario, housing starts would decline to 247,000 in 2026 from 259,000 in 2025.
New home construction is set to decline through 2028 as developers face high costs, weaker demand and more unsold homes, CMHC said in its 2026 Housing Market Outlook published earlier in February.
Today's data support the slowdown scenario.
Market Consensus Before Announcement
Starts expected to fall back to a 265K annual rate in January after rising to 282K in December.
Definition
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.
Description
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.