Housing starts fell below expectations in May

Canada Mortgage and Housing Corp. says the pace of housing starts slowed in May.

The housing agency say the seasonally adjusted annual rate of housing starts slipped to 202,337 units in May, down 13.3% from 233,410 units in April.

Economists on average had expected an annual rate of 205,000, according to Thomson Reuters Eikon.

The annualized pace of urban multiple-unit projects such as condominiums, apartments and townhouses fell 18.5% to 141,851 in May while the pace of single-detached urban starts rose 1.8% to 45,095.

Ontario was hardest hit, with CMHC reporting that housing starts were down 41% in May compared to April.

Rural starts were estimated at a seasonally adjusted annual rate of 15,391 units.

The six-month moving average of the monthly seasonally adjusted annual rates was 201,983 in May compared with 205,717 in April.

In emailed commentary, CIBC World Markets senior economist Royce Mendes said the cooldown in May was to be expected.

“The slowdown isn’t surprising, given that April’s outsized print was simply making up for weaker prior months that had been affected by challenging weather conditions,” Mendes wrote.

“Looking through all the volatility, the roughly 200K pace of starts in Canada is in line with the average of the past couple of quarters, and looks more sustainable than last month’s reading,” he added.

Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.