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Housing Market Index

Are you a builder interested in being part of the HMI panel of respondents?

Single-Family
(includes single detached homes, semi-detached homes and row (townhouse) homes)

Single-Family HMI 26.4

Multi-Family
(includes stacked townhouses, duplexes, triplexes, double duplexes and row duplexes, and low and high-rise apartment buildings)

Multi-family HMI 22.3

Properties of the HMI

(i.e. how to read the number)

  • The HMI is on a scale of 0 to 100
  • It's 0 only when everyone says conditions are "poor"
  • It's 100 only when everyone says conditions are "good"
  • It's 50 when the % saying "good" = the % saying "poor"

2025 Q1 HMI

This page outlines the Q1 2025 results of CHBA’s Housing Market Index (HMI). This informative research and economics product provides a much-needed leading indicator about the current and future health of the residential construction industry in Canada with respect to housing units for ownership (freehold or condominium). The HMI is a sentiment indicator, assessing current selling conditions, expectations for selling conditions over the next six months, and the level of sales office traffic (or other measures of prospective buyer interest), and as such is a proven indicator of housing starts that can be expected in six months and beyond.

The data for the CHBA HMI comes from a panel of CHBA homebuilders and developers from coast to coast. Every quarter, this panel – created in collaboration with our local and provincial home builders’ associations across Canada – responds to a series of questions about market conditions. CHBA then uses proprietary statistical analysis to prepare the quarterly HMI. In addition to the standard HMI questions, each quarter CHBA asks “special questions” that allow the Association to gather data and insights into current issues affecting the industry across the country.

CHBA’s HMI was modelled on the National Association of Home Builders’ (NAHB) very successful and influential US version. The NAHB version is used regularly by financial analysts, the Federal Reserve, policymakers, economic analysts, and the news media, given the importance of the health of the residential construction industry to the overall economy. Through the CHBA HMI, CHBA has done the same for Canada, where it is being used and followed by similar Canadian agencies (e.g. Bank of Canada, Statistics Canada), government policymakers, economists/analysts and media.

If you have any questions or feedback about the CHBA HMI, please contact hmi@chba.ca.

Summary for Q1 2025 HMI

Tariffs, Uncertainty and Sticky-High Mortgage Rates Keep Buyers Sidelined

Both the single-family and multi-family Housing Market Index (HMI) once again reflected overtly pessimistic builder confidence in relation to new home sales during the start of 2025. CHBA’s single-family HMI was 26.4 for Q1 2025. This score remains close to the index’s record low of 24.6 in Q4 2023 and down 8.5 points from the score in from the same time last year. The multi-family HMI was 22.3, which remains essentially at its record low score of 22.0 from Q4 2024. Both the single- and multi-family index were held down by builders’ expectations for future sales conditions this quarter. Over the past two years, builders’ expectations tended to be higher than the measure of current sales sentiment. However, over 50% of both single and multi-family builders rated their expectations for future sales as Poor—the first quarter this has happened.

Regional differences in builder sentiment, highlighted in results from past quarters, largely continued in early 2025. Both single- and multi-family scores in Ontario were in the single digits and at record lows, as the worsening expectations for future sales drove both indices down from the previous quarter. With the single-family HMI at 7.4 and the multi-family HMI at dismal 2.9, the future looks incredibly grim for starts in Ontario in the year ahead and beyond. Sentiment in British Columbia avoided declining further but remained at an abysmal level of 17.2 for single-family sales and 24.8 for multi-family sales. Providing uplift to the national index was the neutral score of 49.0 for single-family sales in the Prairie Provinces and moderately strong HMI scores in the 60s for multi-family sales in the Prairie Provinces and for single-family sales in the Atlantic Provinces.

The escalating trade war threatens residential construction through both higher material prices and lower consumer demand. Despite the uncertainty and rapid changes in tariff threats and implementation, builders were asked about their exposure to U.S. imports as the survey was in field throughout March to early April. A 71% majority of builders said they had already received supplier notification of price increases. At the same time, 75% of builders estimated that American made materials constitute less than 30% of the total value of building materials per unit built.

While industry exposure to current and future counter tariffs is not extreme, the current total cost of construction is already above what many consumers can bear. Longstanding tariffs on a wide range of U.S. building material imports would be a huge setback to achieving housing affordability targets. And the even bigger concern is the impact of the market uncertainty that is keeping buyers on the sidelines and is reflected in the HMI scores. Additional results related to builders’ tariff exposure can be found in the special questions section below.

The continued negative sales conditions in Ontario and British Columbia place significant downward pressure on future housing starts intended for ownership and make it difficult to make progress on national housing affordability. Despite two additional rate cuts from the Bank of Canada in the first quarter, there has been limited material change to fixed mortgage rates, given the ongoing higher yields still prevalent in the bond market. Therefore, higher mortgage rates, compounded by the ongoing excessive stress test, are still supressing demand, as hard and soft construction costs continue to rise.

The pessimistic results of the HMI in recent quarters are also playing out as expected by CMHC’s housing starts data. Starts in areas with at least 10,000 population in the first quarter of 2025 fell 9% year over year nationally to 45,302 units, with the regional starts consistent with the HMI’s findings. Ontario saw the largest contraction, declining 38% over this time last year, falling 6,722 units, with Toronto falling 65% year-over-year for March. The decline in British Columbia was 30% or 3,234 units, with Vancouver falling 59% year-over-year for March. Atlantic Canada saw milder decline of 14% or 417 units. Prairies managed to a strong 24% increase or 2,727 units. These housing starts largely reflect sales conditions over the past three years or more, particularly of the multi-family high rises.

 

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