High interest rates are slowing homebuilding, but the worst is yet to come
interest rates over the last year is starting to throttle the pace of homebuilding, the Canada Mortgage and Housing Corp. (CMHC) warned in a new housing supply report Wednesday.As the Bank of Canada’s interest rates rose substantially through 2022 and early 2023, many homebuyers were priced out of the market and home values retrenched from their pandemic-era highs.
Read more: Canada’s spring housing market has plenty of buyers but is short on supply CMHC said in its report that this has made developers “more cautious” about building new projects.
At the same time, those higher interest rates are driving up costs for builders, the Crown corporation noted.Recent data on housing starts — new units initiated by builders — shows how this slowdown is progressing.Data released Wednesday from CMHC alongside its housing supply report shows annualized starts were down 11.2 per cent month over month in March.Across the first quarter of this year, total starts were at their lowest level since the early pandemic in 2020, according to BMO senior economist Robert Kavcic.“While some volatile weather likely impacted activity in recent months, it’s a good time to step back and look at the bigger, smoothed-out picture for Canadian residential construction.
United States
|
Cases: 46 252 513
Deaths: 750 423
Recovered: 0
|
India
|
Cases: 34 321 025
Deaths: 459 652
Recovered: 0
|
Brazil
|
Cases: 21 835 785
Deaths: 608 235
Recovered: 0
|
United Kingdom
|
Cases: 9 215 683
Deaths: 141 607
Recovered: 0
|
Russia
|
Cases: 8 494 589
Deaths: 237 619
Recovered: 0
|