Low mortgage rates and strong consumer confidence last year drove housing starts to their second highest level in nearly two decades, the Canada Mortgage and Housing Corporation said Tuesday, but already the pace of building new homes is slowing.

About 227,400 new homes were built across the country in 2006. By comparison, starts for 2005 were an estimated 223,900 units.

CMHC chief economist Bob Dugan said he expects the number of starts to ease in 2007, decreasing to an estimated 210,900 units.

That slowdown is already underway, as housing starts dropped noticeably in December compared with November, Dugan said.

"After two strong months in October and November, the volatile multiples segment fell in December and single-detached starts continued to trend downward, reaching their lowest level of the year," he said in a release.

The Prairie region recorded the largest decline, 20.5 per cent.

Starts also fell by 17.9 per cent in the Atlantic region, in British Columbia and Ontario by 7.1 per cent and 3.6 per cent, respectively, and in Quebec by 1.5 per cent.