The agency estimated there were 11,737 actual starts in January and that is extrapolated out to a seasonally adjusted annual rate of 180,248, down from 187,144 in December.
TD Bank economist Connor McDonald said the cooling in the number of housing starts supported the bank's view calling for a soft landing of the Canadian housing market this year and next.
"The decline in starts is an indication of housing supply falling into alignment with demand in most major markets," McDonald said.
"We've yet to see the same trend in Toronto, where new home sales have lagged due to limited supply. However, we expect Toronto to follow suit as homes under construction reach completion and more supply comes online."
Urban starts decreased by 2.7 per cent in January to 163,158 units on an adjusted annual basis.
Multiple urban starts were down six per cent to 102,289 units on the same basis, while single-detached urban starts segment increased by 3.4 per cent to 60,869 units on the same seasonally adjusted basis.
Urban starts in January increased in the Prairies and in Ontario and fell in Atlantic Canada, Quebec and British Columbia.
The month-over-month results came as CMHC also said its six-month moving average of the monthly seasonally adjusted annual rate slipped to 191,456 units in January compared with 194,518 in December.
"The trend in housing starts decreased slightly in January, while the inventory of newly completed and unabsorbed units saw a modest downward trend in the last half of 2013," said Mathieu Laberge, deputy chief economist at CMHC.
"This is consistent with our expectation that builders will continue to gradually adjust activity in order to manage their levels of inventory."
Last week, CMHC predicted builders will likely reduce housing starts in 2014 and 2015 as they adjust to rising interest rates and a slowdown in demand from first-time buyers.
CMHC estimates there will be about 187,300 housing starts in 2014, with a range of between 176,600 and 199,800 units on an annual basis.
That's relatively unchanged from 187,923 units in 2013.
In 2015, CMHC estimates about 184,900 units, with a range from 163,200 to 206,600 units.