OTTAWA — Housing starts rose to the highest level in a year last month, according to Canada Mortgage and Housing Corporation, although they were still below expectations.

The seasonally adjusted annual rate of home construction reached 158,500 units in November, up from 157,400 units the previous month, CMHC said Tuesday.

Despite being at a year high, housing starts during the month were still below economists' forecasts of between 159,500 and 160,000 units.

"The improvement in housing starts continued in November," said Bob Dugan, CMHC's chief economist. "Despite a small decline in November's multiple-home construction, overall starts numbers were up due to a solid increase in singles starts."

The annual rate of urban starts rose 0.7 per cent to 141,100 units in November, the federal agency said. Urban multiple-unit construction fell to 71,300 units from 72,500 units in October, while single urban starts increased 3.4 per cent to 69,800 units.

"Overall, the modest uptick in Canadian residential start underscores the cautious response of builders to the dramatic rebound in overall Canadian housing market activity," said Millan Mulraine, economics strategist at TD Securities.

"Notwithstanding, with the Canadian economy finally emerging from the economic recession and labour market activity appearing to be on the mend, we expect the recent pickup in Canadian housing demand to gain further traction, which will likely provide a further boost to residential building activity."