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Housing starts dip to near ten-year low

Housing starts dip to near ten-year low

Posted on: 11/9/2018 | Author: ATB Financial's Economics + Research Team

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Earlier this week, The Owl looked at how building permits are pointing toward slower construction activity in 2019. One need not peer into the future to see the effects of softening conditions. Other indicators suggest the building slowdown is already upon us.

Housing starts in October dipped to just over 18,000. This figure is seasonally adjusted and reported at an annualized rate, meaning it represents the number of new homes and condos that would be built in one complete year if the same pace were to continue for twelve months.

October's figure represents a drop of 18 per cent from the previous months and is nearly half the rate of two months earlier. It's the lowest since May of 2009, the midst of the global economic crisis nearly a decade ago.

The tumble in housing starts likely stems from the market's imbalance of supply and demand. There is a massive inventory of unsold homes on the market, particularly in Edmonton and Calgary. As a result, home builders are pulling back on new starts until the volume of new and existing homes starts to drop.

Housing starts, graph

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