CMHC's seasonally adjusted rate was 189,708 units last month, up from 151,238 in February.
Most of the growth came from multiple-unit dwellings, especially in urban areas.
Starts of multiple-unit dwellings such as condos and apartments was up 48.2 per cent, rising to 125,263 units on an annualized basis March.
Construction on detached urban houses accounted to 52,196 units of the total, down 3.4 per cent from February.
Ontario, British Columbia, Quebec and the Prairies saw increases in urban housing construction, while the Atlantic region had a decline.
CMHC chief economist Bob Dugan says the month-to-month comparison is only part of the story and the trend has moved lower since September "partly reflecting efforts to manage the level of completed but unsold units."
The six-month trend in March was 179,016 units, down from 180.236 in February.