Market Memo: Housing Start Doldrums – Mar. 2026

Housing starts in Canada improved in February climbing 4.5% to a seasonally adjusted annual rate of 251,000 units, compared to January’s 240,000 units. 

However, month-over-month statistics can be volatile so Canada Mortgage and Housing Corporation, which tracks housing starts, uses a six-month rolling average to smooth-out the peaks and valleys.  That figure shows a very modest 0.4% increase to 256,000 starts. 

"In February, the six-month trend in housing starts was essentially flat, indicating that the trend in new construction activity remains relatively steady despite ongoing monthly volatility,” said CMHC deputy chief economist Kevin Hughes in a news release. 

A Tale of Two Markets

Taking a look at the bigger picture of the overall housing supply in Canada, CMHC suggests there are two situations emerging. 

The agency’s latest Housing Supply Report shows a solid 6.0% increase in housing starts last year, driven by rental construction.  As good as that is for renters, especially in Canada’s bigger markets, it appears to have come at the expense of those looking to buy their own home. 

“On the surface, housing starts last year were quite strong, outpacing annual starts in 2024 and led by historic levels of rental starts and completions,” said CMHC Deputy Chief Economist, Tania Bourassa-Ochoa. 

“However, homeownership supply, particularly in the condominium segment, continues to face significant challenges in the face of falling presales. This threatens both the availability and affordability of ownership options for Canadians in the medium-term.” 

Signs of Future Tightening

CMHC defines a “housing start” as the point when the footing of a foundation has been poured.  That means the construction is based on decisions that were made 12 to 18 months earlier, making housing-start statistics a, so-called, lagging indicator.  A slowdown in starts today could signal a tighter supply of new, housing-for-homeownership in the future. 

On-going economic uncertainty – erratic U.S. trade policy and the war in Iran which are raising construction costs – along with declining immigration and increasing unsold inventories here will likely weigh on builders’ decisions to move ahead with any new projects. 

Resale Market Tighter but Balanced

The home resale market remains active but is showing signs of tightening as the spring buying season arrives.  New listings have been slowing for the past couple of months and February posted a 3.9% contraction from January. 

The Canadian Real Estate Association reports the sales-to-new-listings ratio now stands at 47.6%, compared to the long-term average of 55%, and remains within balanced housing market conditions.