TORONTO - Stronger demand and economic conditions are expected to boost housing starts in 2010, Canada Mortgage and Housing Corp said in an upwardly revised forecast for new home construction on Monday.

CMHC, the federal government's housing agency, raised its forecast for 2010 housing starts to 164,900 units from a previous view of 150,300 units.

Demand for existing homes has rebounded since the beginning of the year. In addition, lower inventory levels characterize both the new and existing home markets. As a result, stronger housing demand will be reflected in higher levels of housing starts in 2010, said Bob Dugan, chief economist for CMHC.

The agency left its 2009 forecast for starts unchanged at 141,900 units in its fourth quarter Housing Market Outlook. There were 211,056 starts in 2008.

(Reporting by Ka Yan Ng, Editing by Chizu Nomiyama)