06:40 AM EDT, 08/07/2025 (MT Newswires) -- Canada's recent $1.2 billion of support for the lumber industry included a prioritization of Canadian softwood in plans to ramp up housing construction, with an aim for 500,000 units per year, said Bank of Montreal (BMO).

This is all part of the effort to better balance supply and

demand, and so improve affordability, noted the bank.

However, BMO pointed out three small things:

-- 1) Affordability has already improved substantially in the past two years, thanks to lower interest rates, some moderate income growth, and lower home prices -- in part thanks to much cooler population growth. The Bank of Canada's affordability measure dropped from a peak of 54.8% in Q3 2023 to 45.8% in Q1 2025 -- a lower number is more affordable and it stood at 36.0% before the pandemic, or nearly normal. We got there without starts surging.

-- 2) In more than 75 years of data, the most starts Canada has ever seen was 273,200 -- in 1976. 500,000 units is a "tall order."

-- 3) And, far from being particularly weak, starts per capita have been "solid" in recent years and consistently higher than in the United States for the past 20 years.

More supply is welcome, but BMO added to keep an eye on the other curve as well.