High Interest Rates Resulted In 30,000 Fewer Housing Starts In 2023: CMHC

This 30,000-unit decline amounts to about a 12% decline in housing starts, out of a total annual average of around 250,000.

According to modeling by the CMHC, interest rates decreased housing starts by about 30,000 units, a decline of 10 to 15%.

"Our modelling suggests that in 2023, higher interest rates decreased housing starts by about 30,000 units in Canada," said CMHC Deputy Chief Economist Aled ab Iorwerth in a commentary article on October 3.

This 30,000-unit decline amounts to about a 12% decline in housing starts, out of a total annual average of around 250,000.

The Bank of Canada's policy interest rate finished 2022 at 4.25%, was then raised to 4.50% in January, and stayed there until it was raised to 4.75% in June, then to 5.00% in July, where it stayed for the rest of 2023 until this June when the rate cuts began.