PRINCE.EDWARD.ISLAND (CBC) - There will be fewer new homes built on P.E.I. in 2008, the Canada Mortgage and Housing Corporation forecast Thursday.

CMHC is blaming a slowing economy.

The federal agency predicts 700 new homes will be built on the Island this year, down from 750 in 2007. The slowdown is predicted to continue into 2009, with 675 new builds expected.

While the economy is slowing, analysts are expecting modest economic growth on P.E.I. that will keep resale values on a steady climb. They're predicting an increase of about 3 per cent in both 2008 and 2009.

The picture on P.E.I. reflects a national trend, with overall starts down, and lower numbers in seven provinces.

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