The downturn marks the fourth consecutive month of decline for the six-month trend measure, which now sits at 254,794 units. According to Tania Bourassa-Ochoa, deputy chief economist at the Canada Mortgage and Housing Corp., the figures reflect a broader loss of momentum across the sector. Developers are currently grappling with a combination of geopolitical friction, elevated construction expenses, and mounting inventory that has stifled new projects.

Factors Stalling Supply

The agency warned that the outlook remains bleak for the medium term. In a report released earlier this month, the CMHC projected that new home construction will likely remain well below the historical decade average for the next three years. Current market conditions have created significant headwinds for housing supply, including:

• Persistent trade uncertainty affecting material costs.
• Weakening buyer demand amid high interest rates.
• Rising inventories of unsold units in major urban centers.

Despite the overall national slowdown, localized data offered a slight silver lining. In urban centers with populations of 10,000 or more, actual housing starts rose 1% year-over-year to 16,088 units in January 2026. However, this marginal gain does little to offset the broader slump, as the industry prepares for a prolonged period of subdued activity according to the agency's latest forecasts.