Housing rebound in April may be tied to tightening of mortgage insurance rules

Posted by Rumin Mann
May 30th, 2011

Following a sharp decline in March, B.C. housing starts staged a partial rebound in April, rising 23 per cent to a seasonally adjusted annualized rate of 24,600 units. Despite the increase, housing starts remained relatively low and within the range observed over the past 15 months.

April’s gain came in both single-detached and multiple-family unit housing starts. Multiple-family starts, which include apartment, row and attached units, rebounded 23.8 per cent in April to 15,100 units, following a steep decline in March.

Surprisingly, single-detached home starts also jumped nearly 23 per cent to 7,500 annualized units. This was the highest rate of annualized single-detached housing starts since October 2010 and may reflect tightening of mortgage insurance rules in place since March 18. The prospect of more restrictive rules may have led to an increase in the number of buyers entering into binding agreements for new homes during in March, which could have led to an April bump in construction.

Regionally, Metro Vancouver drove growth in housing starts during the month, rebounding 32.8 per cent to 15,800 annualized units. Excluding Metro Vancouver, provincial housing starts rose by 8.6 per cent.

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