Housing starts declined 5.2% year-over-year in May in Canadian centres with populations of 10,000 or more, says a new Canada Mortgage and Housing Corporation report.

Actual starts fell to 22,633 units, down from 23,879 units in May 2025, according to CMHC’s new data. Multi-unit project declines exceeded the national average, dropping 6% year-over-year to 17,046 from 18,155.

“May’s data showed mixed results,” said Aled ab Iorwerth, a CMHC deputy chief economist.. “Year-to-date housing starts are slightly up from last year, and the monthly starts trend was basically flat, while units under construction and completions increased. Overall, these results suggest that construction activity is uneven and taken together with the decline of approved units not yet started and market intelligence point to weaker momentum for future supply.”

CMHC has been pointing to a forthcoming residential construction slowdown in recent months.

Despite the monthly decline, year-to-date housing starts totalled 93,644 units through the first five months of 2026, a 3% increase from the same period in 2025. CMHC said stronger activity in British Columbia and Ontario more than offset declines across the Prairie provinces.

The national seasonally adjusted annual rate (SAAR) of housing starts fell 6% in May to 261,377 units from 278,380 units in April. Meanwhile, CMHC’s six-month trend measure of housing starts was essentially unchanged, rising 0.5% to 258,010 units.

Construction activity presented a mixed picture. The number of housing units under construction in centres with populations of 50,000 or more increased 0.9% month-over-month to 374,662 units, while completions rose 10.6% to 16,880 units. However, the number of approved units awaiting construction declined 2.4% to 138,842 units.

Among Canada’s three largest census metropolitan areas, Montreal recorded an 18% year-over-year increase in actual housing starts, driven by multi-unit projects. Vancouver saw starts decline 7%, while Toronto posted a 12% decrease.

The rural starts monthly SAAR estimate was 14,357 units.

Single-detached home starts dipped 1% year-over-year, falling to 3,185 from 3,224.

CMHC is Canada’s national housing agency. It provides mortgage loan insurance, housing market research and data, and works with governments, private-sector organizations and non-profits to support housing affordability and supply across the country.

In 2025, CMHC reported that Canada needs to build about twice as many homes annually over the next decade to restore housing affordability.

CMHC estimates that housing starts must rise to 430,000 to 480,000 per year until 2035 to meet projected demand. The required annual average equates to a total of about 4.8 million homes.

Ab Iowerth said then that Doubling the pace of housing construction in Canada is achievable, but not without a significantly larger and modernized workforce, more private investment, less regulation, fewer delays, and lower development costs. Significant innovation in construction technology and growth in labour productivity will also be required, he added.

Photo: Shutterstock

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