The seasonally adjusted annual rate1 of housing starts was 197,900 in May, reflecting robust construction activity in the residential sector, reports Canada Mortgage and Housing Corporation (CMHC).

"Last month's slight decline in the housing starts trend is consistent with the expected moderation in the level of activity later this year and in 2004", said Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. "Low mortgage rates, favourable labour market conditions and consumer confidence continue to support healthy levels of activity in the housing market. Rising house prices also yielded higher returns on residential real estate than on bonds and equities, further boosting demand for housing. Sales of new homes have stimulated construction activity given the low inventories of completed units available for sale. Year-to-date, actual starts have exceeded last year's level by 2.4%."

While the seasonally adjusted annual rate of urban multiple starts decreased 9.1% to 74,500 units in May 2003 compared with 82,000 units in April, the rate is in line with the average of 76,000 in 2002. Year-to-date actual urban multiple starts having increased 12.5%, remain high compared with the same period in 2002.

The seasonally adjusted annual rate of urban single starts edged down 2.4% to 94,100 units in May from 96,400 the previous month. This was reflected in all regions of the country except Ontario where urban single starts increased 3.1%. In terms of actual starts, urban single starts year-to-date are 5.3% lower than for the same period of 2002.

Rural starts in May were estimated at a seasonally adjusted annual rate of 29,300 units.

1. All starts figures in this release, other than actual starts, are seasonally adjusted annual rates (SAAR) that are monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels.

2. Figures for the most recent month are preliminary and subject to revisions due to corrections or updates from quarterly enumeration or sampling results.

-For more information, please contact: Bob Dugan, Canada Mortgage and Housing Corporation, (613) 748-4009 e-mail: bdugan@cmhc-schl.gc.ca