Housing starts picked up the pace in July, the CMHC said Monday. ((iStock))

Canada Mortgage and Housing Corp. says housing starts increased to a seasonally adjusted annual pace of 189,784 in July, compared with 185,952 in June.

The federal agency says the overall increase came as the pace of urban starts increased slightly to 200,098 units in July, compared with 198,665 in June.

It says multiple urban starts decreased to 115,870 units in July, while single-detached urban starts increased to 67,062 units.

Housing starts are when construction begins on a new domicile, such as a family home or a condo building. They are considered leading indicators of the economy because they tend to lead to more spending down the line on things like furniture and appliances.

"Starts have rebounded," Scotiabank economists Derek Holt and Dov Ziegler said in a note to clients Monday. "As the actual volumes … are higher in the summer than in the winter (which was weak), this actually points to a solid increase in construction this year vs. 2013.​"

CMHC says the seasonally adjusted annual rate of urban starts increased in Atlantic Canada and Ontario, and decreased in the Prairies.

The agency says there were also modest decreases in British Columbia and Quebec.

Rural starts were estimated at a seasonally adjusted annual rate of 17,166 compared with 16,206 in June.

With files from CBC News