U.S., Canada Housing Starts Decline in August
U.S., Canada Housing Starts Decline in August
Anonymous
Key Points
1
U.S. July housing starts were revised to an annualized 1.439 million from the previously reported 1.239 million, while economists had expected August starts to rebound 6.1% to 1.315 million.
2
In Canada, units under construction in urban centers with populations above 50,000 fell 0.4% month over month to 371,658 in August, while completions dropped 11.2% to 17,550 units.
3
Canadian building permits approved but not yet started increased 0.7% in August to 142,423 units, suggesting a substantial pipeline of authorized projects despite the slowdown in active construction.
4
The Canada Mortgage and Housing Corp. estimates annual starts must reach 417,000 to 469,000 units to restore affordability to prepandemic levels by 2036, a target the recent slowdown puts at risk.
5
Rural Canadian housing starts were estimated at a seasonally adjusted annual rate of 11,224 units in August.
U.S. housing starts fell 2.6% in August to 1.309 million units, Commerce Department, extending a summer slowdown and defying economist expectations for a rebound. Canadian starts also stalled, dropping 0.1% to 229,046 units—the lowest level since March 2025—signaling that housing construction in both nations is moderating at a time when affordable housing remains scarce Wall Street Journal.
U.S. Starts Miss Forecast After July Revision Upward
The August decline caught economists off-guard. RTT News reported housing starts dropped unexpectedly, extending July's 9% plunge. July figures were revised sharply upward to 1.439 million from 1.239 million, but August fell short of the 6.1% rebound economists had predicted Nasdaq. The annual rate of 1.309 million is now 1.2% below August 2025 levels Calculated Risk.
Canada's Urban Construction Losing Momentum
Canadian housing construction under way fell 0.4% month-over-month in cities with populations above 50,000, reaching 371,658 units Wall Street Journal. Completions dropped sharply—down 11.2% to just 17,550 units. Yet permits approved but not started climbed 0.7% to 142,423 units, indicating a substantial pipeline of projects waiting to begin construction despite the slowdown in active work.
Rural Canadian starts were estimated at 11,224 units on an annualized basis. The Canada Mortgage and Housing Corp. estimates the nation needs 417,000 to 469,000 annual starts to restore prepandemic housing affordability by 2036—a target the recent decline puts at serious risk.
Regional Splits Mask Deepening Construction Slowdown
Canada's regional picture is uneven. Quebec and Alberta posted gains, while Ontario and other provinces retreated. Montréal's trend edged up, but Toronto's remained flat. Ottawa was an outlier: starts rose 8% in the first eight months of 2026, lifted by a 40% surge in single-family construction. Kingston, by contrast, recorded a steep decline.
Year-to-date starts in larger Canadian centers are down roughly 4% from a year ago. The six-month trend in total starts also declined, reinforcing fears that softer construction activity could worsen the nation's housing shortage and keep affordability out of reach for many buyers Wall Street Journal.
Mortgage Rates and Economic Uncertainty Weigh on Builders
Thirty-year mortgage rates hovered near 7% in August, creating headwinds for both buyers and builders Investing Live. The dual decline in U.S. and Canadian housing starts signals that construction firms are pulling back in the face of higher borrowing costs, softer demand, and economic uncertainty. With permits also falling—down 2.7% in the U.S.—the pipeline for future starts looks tight.
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