Today's Report (12/15/2021)

The trend in housing starts was 267,365 units in November, up from 264,583 units in October, according to Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

The standalone monthly SAAR of housing starts for all areas in Canada was 301,279 units in November, an increase of 26% from 238,366 units in October. The SAAR of urban starts increased by 29% in November to 279,396 units. Multiple urban starts increased by 41% to 221,153 units in November, while single-detached urban starts decreased by 1% to 58,243 units.

What it is

It records the number of new homes being built, in the preceding month. SAAR (seasonally adjusted annual rate). The report will show last month’s data. For example, the release comes out in Feb, but will represent data for Jan.

What Are The Fundamental Effects

This is a leading indicator of economic health. A sharp drop-off in home construction is a tale-tale sign that the broad economy is on the verge of slowing, whilst a rebound in housing starts, and home buying sets the stage for a pickup in overall business activity.

How Does It Affect The Markets

CURRENCY - A strong housing report is considered bullish for the Canadian Dollar because it usually supports a scenario of higher corporate profits and firming of interest rates. Weak housing data can cause the value of the dollar to slip.

STOCKS - Prolonged weakness in housing starts can alarm stock investors since it acts as a precursor to a broader downturn in the economy. If housing activity is vibrant and inflation remains contained, it can be viewed as a positive sign.

BONDS - A healthy pickup depicts an economy that is robust and where inflation pressures are likely to accelerate. That can knock down bond prices and cause yields to rise.