Canadian Home Buyers in US Down: Tariffs Driving Drop

Canadian home buyers are leaving the U.S. housing market at a pace not seen in years, driven by tariffs and a weaker loonie. Trade policy and currency shifts are now reshaping who buys where.

Canadian traffic share on Realtor.com (Q3 2025): 32.1% of international demand · Year-over-year decline: 4.5 percentage points · U.S. tariff on Canadian imports (Aug 2025): 35% · Canadian home price decline streak: 4 years as of March 2025

From the data, one pattern is clear: Canadian engagement with the U.S. housing market is shrinking fast, and the policy shock from tariffs is the clearest catalyst.

Why are Canadians selling their US properties?

The U.S. trade offensive against Canada began in earnest in early 2025. On March 4, tariffs of 25% on most Canadian exports—including 50% on steel and aluminum—took effect, as documented by Wikipedia (timeline of the trade war). Canada retaliated the same day. By August, the U.S. had raised tariffs to 35% on Canadian imports, although over 85% of cross‑border trade remained tariff‑free under USMCA (Realtor.com).

The impact on home buying was immediate. Canadian online traffic to U.S. listings on Realtor.com fell from 36.6% of international demand in Q3 2024 to 32.1% in Q3 2025—a drop of 4.5 percentage points (Realtor.com). Redfin recorded a 34.2% year‑over‑year plunge in Canadian home searches in April 2025 (Redfin).

Impact of U.S. tariffs on Canadian buyers

Tariffs raise the cost of everything from lumber to furniture—materials that fuel home building and renovations. The 10% tariff on Canadian timber (effective mid‑October 2025) and the 25% levy on cabinets and furniture (Realtor.com) directly hit the construction supply chain. For Canadian buyers already facing a weaker loonie, the total cost of owning a U.S. home became harder to justify.

Role of the Canadian dollar exchange rate

The Canadian dollar lost ground against the U.S. dollar throughout 2025, eroding purchasing power. A home listed at $400,000 USD in early 2024 might have cost around C$540,000; by mid‑2025, the same price demanded close to C$560,000 (Reuters currency data). That swing alone can push a budget past breaking point.

Snowbird demographic shifts

Older Canadian snowbirds—traditionally the largest group of cross‑border buyers—are reassessing. Some are selling their Florida or Arizona condos and either staying in Canada or moving to lower‑cost destinations. USA Today reported that the share of Canadian buyers in U.S. home purchases fell sharply in Q1 2025, a trend that accelerated after the Liberation Day tariff announcements.

What this means: Trade policy, not price, is now the decisive factor. Canadian snowbirds are reconsidering cross-border ownership as costs climb.

Are US home sales declining?

Yes—and the decline is partly linked to the retreat of foreign buyers. The spring 2025 selling season, traditionally a bellwether, started on a sour note. The Wall Street Journal reported weaker sales volumes in April and May, with reduced international demand a contributing factor.

National home sales data for spring 2025

Nationwide, existing home sales in April 2025 fell 3.2% month‑over‑month, according to the National Association of Realtors (NAR). Foreign buyer purchases totalled just 54,300 homes in the period from April 2023 to March 2024—the lowest in 15 years—representing $42 billion in volume (NAR).

Regional variations in the Sun Belt

Sun Belt markets like Florida, Arizona, and Texas, which historically attract Canadian snowbirds, saw sharper drops in foreign‑buyer activity. Realtor.com data for Q3 2025 showed that Canadian interest in those states fell more steeply than in other regions (Realtor.com).

The pattern: U.S. home sales are weakening broadly, and the loss of Canadian demand amplifies the slowdown in markets that depend on cross‑border buyers. Without a tariff resolution, the spring selling season could be the weakest in a decade.

Are Canadian house prices dropping?

Canadian home prices have been declining for four consecutive years. RBC Economics reported in March 2025 that the national benchmark price had fallen for 48 consecutive months, making it the longest price‑decline streak in modern Canadian housing history.

RBC report: four years of declining home prices

RBC’s analysis attributed the persistent drop to high interest rates, record household debt, and a slowing economy. Even as prices fall, affordability remains strained because wages have not kept pace with the cumulative rise from earlier years (RBC Economics).

Comparison to U.S. price trends

While U.S. home prices have also softened in some regions, the decline in Canada is both deeper and more sustained. U.S. median prices are still roughly 20–30% lower than Canadian medians in major cities—a gap that once drew Canadians south. Now, tariffs and currency headwinds are closing that advantage (Reuters analysis).

Why this matters: Falling Canadian prices could discourage homeowners from selling to move to the U.S., because they would lock in losses on their primary residence. That further reduces the pool of potential U.S. buyers.

Will there be a housing crash in Canada in 2026?

TD Bank revised its 2026 housing market forecast in mid‑2025, expecting lower sales and further price adjustments (TD Bank). The bank cited the trade war recession risk and high household debt as primary factors.

TD Bank’s revised 2026 forecast

TD now projects a 5–10% decline in Canadian home prices from 2025 levels, with sales volumes remaining well below the 10‑year average. The forecast assumes that tariffs stay elevated and that the Canadian economy slows (TD Bank).

Factors that could prevent or trigger a crash

A full‑blown crash is not inevitable. Canada’s strict mortgage underwriting rules and the fact that over 85% of Canada‑U.S. trade remains tariff‑free under USMCA (Wikipedia) provide cushions. However, if the trade war deepens or interest rates stay higher for longer, the risk of a disorderly correction rises.

What this means: TD Bank expects a 5-10% price drop in Canada, but strict mortgage rules could prevent a full crash.

Is it cheaper to buy a house in Canada or the USA?

Even with Canada’s price declines, buying a home in the U.S. remains cheaper in most markets—but the gap is narrowing. Median home prices in the U.S. are typically 30–40% lower than in Canada’s largest cities (NAR).

Median home prices in Canada vs. U.S.

As of mid‑2025, the Canadian national benchmark price was around C$720,000, while the U.S. median was approximately US$380,000 (about C$520,000). That’s a C$200,000 difference—significant, but shrinking as Canadian prices fall and U.S. prices hold (RBC Economics).

Cost of living and mortgage rate differences

U.S. mortgage rates have been higher (around 7% vs. Canada’s 5.5%), but the lower entry price often still makes U.S. homes more affordable on a monthly basis. However, the weak loonie and higher property taxes in some U.S. states can erode that advantage (Reuters).

What this means: The price gap is narrowing. Canadians willing to accept currency and tariff risk can still find bargains, but the window is closing.

Timeline: Key events in the Canadian buyer retreat

• January 2025: U.S. tariff threats surface; initial dip in Canadian home searches (21.3% drop in February vs. prior year, per Redfin).
• March 4, 2025: U.S. imposes 25% tariffs on Canadian exports; Canada retaliates same day (Wikipedia timeline).
• April 2025: Liberation Day tariff announcements; Canadian Redfin searches plunge 34.2% year‑over‑year. Canada pauses some retaliatory tariffs for manufacturing (Wikipedia timeline).
• Q1 2025: Canadian share of U.S. home purchases drops sharply (USA Today).
• March 2025: RBC reports four years of declining Canadian home prices (RBC Economics).
• June 30, 2025: U.S. restarts trade talks after Canada scraps digital services tax (Wikipedia timeline).
• August 2025: U.S. raises tariffs to 35% on Canadian imports; NAR reports foreign buying at 15‑year low (NAR).
• August 22, 2025: Canada drops many retaliatory tariffs to restart trade talks (Wikipedia timeline).
• Mid‑2025: TD Bank revises 2026 forecast, expects lower Canadian sales and prices (TD Bank).

What we know vs. what’s still unclear

Confirmed: Canadian home searches and purchases in the U.S. declined sharply in 2025, driven by tariffs, a weaker loonie, and trade uncertainty. Canadian home prices have fallen for four consecutive years. Foreign home buying in the U.S. is at a 15‑year low.

Unclear: Whether the decline will persist into 2026, or if a trade deal could revive interest. Whether U.S. home sales can recover later in 2025 as summer inventory builds. And whether Canada’s housing market will stabilize or slide further into a correction.

This trend mirrors the broader retreat of Canadian snowbirds selling U.S. homes, as trade tensions and a weaker loonie reshape cross-border property markets.

FAQs

How do US-Canada tariffs affect Canadian home buyers?

Tariffs raise costs for building materials and consumer goods, making U.S. home ownership more expensive. They also erode confidence and weaken the Canadian dollar, reducing purchasing power (Bungalow Finder).

Are Canadian snowbirds selling their US homes in large numbers?

Data from Realtor.com shows a 4.5 percentage point drop in Canadian traffic share, but actual sales data lags. Surveys indicate many are considering selling (Realtor.com).

Will the US housing market crash in 2026?

No major forecaster predicts a crash, but slower sales and price adjustments are expected, partly due to reduced foreign demand (WSJ).

Is now a bad time for Canadians to buy US property?

Not necessarily—but the risks are higher. A weaker loonie and tariff uncertainty make timing critical. Buyers who lock in exchange rates and choose tariff‑immune markets may still find value (Reuters).

How much US property is owned by Canada?

Exact figures are hard to pin down, but NAR data shows Canadians bought 54,300 U.S. homes in the 12 months ending March 2024, representing about $42B in volume (NAR).

What country are most Canadians moving to besides the US?

Recent trends show increased interest in Mexico and Europe. Mexico accounted for 5.6% of international buyer traffic on Realtor.com in Q3 2025 (Realtor.com).

What is the outlook for Canadian home buyers in the US?

Near term: continued weakness unless tariffs are rolled back. Long term: the demographic pull of sun and lower prices will remain, but policy now dictates the pace (RBC Economics).

For Canadian buyers weighing a U.S. purchase, the choice has become clear: wait for tariff clarity and a stronger currency, or accept the current headwinds and act on the narrowing price gap. Snowbirds who decide to sell may find a buyer—but likely at a discount, because the market has already priced in the trade war. The data tells Canadians to be patient, not panicked.

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