OTTAWA—The pace of home construction in Canada picked up last month and a lot of the push came from Ontario, the federal housing agency said Wednesday, offering the latest evidence that the economy is building momentum.

Canada Mortgage and Housing Corp. said February’s seasonally adjusted rate for housing starts was 210,207 units, up from 208,934 in January and above expectations of 200,000 units, according to a consensus estimate from Thomson Reuters.

Activity in the multi-unit sector fell but there was a big jump in single, detached homes in urban areas, CMHC said.

There were 71,871 single detached houses started in February in urban areas — up 12.1 per cent from the prior month — mostly because of Ontario, where there has been a shortage in the Toronto area. The lack of supply, particularly for detached homes, has been a major factor driving up prices in the city and other parts of southern Ontario.

“Prices are telling builders to build, and that’s exactly what they’re doing,” CIBC economist Nick Exarhos wrote in a research note.

“An upturn in (building) permit figures over the past several months suggests that momentum in building could continue for a few more months yet. Chalk up another consensus-beating result for the Canadian housing market.”

Vancouver was a different story, with housing starts down 42 per cent from January. The city is settling back to a more normal pace of house construction after an unsustainable record pace last year, TD Bank economist Diana Petramala said.

Statistics Canada also reported Wednesday that the value of building permits issued by Canadian municipalities in January rose by 5.4 per cent from the previous month to hit $7.6 billion, including $5.1 billion in the residential sector.

CMHC said multiple-unit projects such as condos and apartments in urban areas declined by 4.7 per cent nationally to 121,164 units in February. Rural starts across Canada were estimated at a seasonally adjusted annual rate of 17,172 units.

The agency’s six-month average of monthly seasonally adjusted annual rates stood at 204,669 units across Canada in February, up from 200,225 units in January.

“This winter has seen Canada’s national housing starts trend upward, supported mostly by increased construction of homes in Ontario,” CMHC chief economist Bob Dugan said in a statement.

“New single-detached home construction in Ontario is reaching levels not seen in the province since July 2008 — offsetting recent slowdowns in British Columbia.”

Petramala said the unseasonably warm weather may also have played a factor in the first months of 2017.

Combined with recent positive data on jobs, GDP and trade, the housing start and building permit figures released Wednesday serve as the latest signs that the economy is on an upswing.