According to the latest report from CMHC (Canada Mortgage and Housing Corporation), the annual pace of housing starts in October fell 17%, marking one of the most notable slowdowns in 2024–2025. With high construction costs, labour shortages, and shifting economic conditions, this decline signals an important moment for homebuyers, investors, and mortgage seekers across Canada.
As a mortgage advisor serving buyers across Ontario & Canada, I break down what this drop really means and how it can impact your affordability, interest rates, and overall home-buying strategy.
Why Did Housing Starts Drop by 17%?
Several factors contributed to the slowdown in October:
✔ Higher construction costs
Lumber, labour, and development fees continue to rise, slowing down new builds.
✔ Elevated interest rates
Developers face higher borrowing costs, causing delays and cancellations.
✔ Labour shortages
Limited skilled trades are stretching project timelines.
✔ Economic uncertainty
Developers are cautious about launching large-scale projects until demand stabilizes.
While a drop in housing starts may seem like bad news, there are important insights here for buyers planning to enter the market.
How This Affects Homebuyers in 2024–2025
1. Lower Supply Can Increase Competition
With fewer new homes entering the market, existing inventory becomes more valuable. Buyers may see:
* More competitive bidding in high-demand cities
* Stable or rising prices in the resale market
* Tight supply in condo and townhouse categories
2. Potential Pressure on Renters
Less housing construction means slower rental supply growth. This could push rents higher in major markets like Toronto, Mississauga, Brampton, and Kitchener.
3. A Stronger Shift Toward Alternative Lending
With affordability challenges growing, many Canadians are turning to:
* Alternative lenders
* Private mortgages
* Flexible qualification options
* Equity-based financing
This becomes especially important for:
* Self-employed buyers
* Newcomers to Canada
* Those with unique income situations
* Borrowers impacted by higher interest rates
If banks say no, alternative lending often provides a path forward.
4. Possible Rate Adjustments in 2025
A slowdown in construction usually aligns with broader economic cooling. This may push major financial institutions and the Bank of Canada to consider rate reductions or stabilization going into mid-2025.
For buyers waiting for better opportunities, this could be an encouraging sign.
Is It Still a Good Time to Buy a Home?
Absolutely, but strategy matters more than ever.
Here’s what I recommend for buyers in today’s market:
✓ Get pre-approved early
Knowing your numbers gives you a major advantage when inventory is tight.
✓ Consider alternative lending
Flexible solutions can help you qualify even when banks decline.
✓ Explore equity-based options
Especially useful for investments, renovations, and refinancing.
✓ Work with an experienced mortgage advisor
A strong guidance plan can help you navigate changing market conditions with confidence.
The 17% drop in housing starts highlights ongoing supply challenges across Canada. While this slows new home availability, it also opens opportunities for buyers who plan strategically with expert mortgage guidance.
Whether you’re a first-time buyer, investor, or refinancing your home, staying informed helps you make the right move in a shifting market.
Need Personalized Mortgage Advice?
I help buyers across Canada secure the right mortgage bank, alternative, or private, based on their real financial situation.
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