Canadian Mortgage Broker News - Housing starts expected to decline for 2011

Housing starts expected to decline for 2011

Housing starts are expected to continue to moderate in the last quarter of 2010 and into 2011, according to the Canada Mortgage and Housing Corporation (CMHC).

CMHC estimates total housing starts for 2010 will be in the range of 176,700 to 194,700 units, with a point forecast of 186,200 units, while starts in 2011 will be in the range of 148,000 to 202,300 units, with a point forecast of 174,800 units.

“High employment levels and low mortgage rates will continue to support demand for new homes in 2011. Nevertheless, housing starts will decrease to levels more in line with long-term demographic fundamentals next year,” CMHC Chief Economist Bob Dugan said in a news release published Nov. 15.

Dugan also expects that the resale home market will remain balanced over the next two years as existing homes sales continue to ease and inventory levels rise.

Existing home sales are expected to be in the range of 423,800 to 455,900 units in 2010, with a point forecast of 440,300 units sales. Sales in 2011 should be in the range of 390,600 to 483,700 units with a point forecast of 438,400 units.

As supply and demand move into balance during 2011, the average existing home price is expected to increase only modestly in 2011.