OTTAWA — Housing starts are expected to reach 203,900 units this year, the third highest level since 1989, says Canada Mortgage and Housing Corp.

The projection is down from a 15-year high of 218,400 units in 2003, the agency said Thursday.

“Consumer confidence remains high while mortgage rates remain low by historical standards,” Bob Dugan, chief economist at CMHC, said in a statement. “These factors, combined with accelerated economic growth and continued job creation will contribute to the continued strong performance of the housing market this year,” he said.

“Gradually rising mortgage rates in the latter half of 2004 will also ease the pace of new home construction, particularly in 2005 when starts are expected to reach 191,800 units.”

The resale of homes is expected to be below last year’s record pace, the agency said.

© The Vancouver Sun 2004