Canadian Homebuyers Retreat from U.S. Market Amid Trade Turmoil

Palm Springs, USA - Recent months have seen a notable drop in Canadian interest in the U.S. housing market, with various factors contributing to this trend. Canadian demand for real estate in the U.S. experienced a sharp decline, as reported by Weekly Voice. A report from Redfin indicated that online searches for U.S. homes by Canadians fell nearly 30% in May 2025 compared to the same month in 2024. This decline in interest began in February 2025, coinciding with escalating trade tensions and tariffs on Canadian goods, leading to a considerable shift in the market.

The most significant dip occurred in April 2025, with a staggering 34.2% year-over-year decrease in searches. Major metropolitan areas such as Houston, Philadelphia, and Chicago saw eye-popping drops in inquiries—down 55.2%, 53%, and 47%, respectively. It seems the combination of political unease, a weakened Canadian dollar, and soaring property prices in the U.S. is taking its toll, particularly in Florida, where beloved cities for Canadian snowbirds, like Miami and Orlando, noted around a 30% decrease in interest.

Factors Driving the Decline

What’s really behind this shift? Political and economic uncertainty is certainly a driving force. Redfin’s head of economics research, Chen Zhao, highlighted that the decline corresponds with the timeline of tariff-related instability, suggesting a further weakening of the U.S. housing market might be on the horizon. Moreover, the current exchange rate isn’t doing any favors; the Canadian dollar has been weaker than it was at the turn of the year, impacting the ability of Canadians to make significant purchases across the border, although it saw gains in early February.

In fact, other statistics underscore this trend as well. Statistics Canada reported a significant 33% fall in Canadians returning by car from the U.S., and there was an 8.2% year-over-year drop in flights to U.S. destinations in May. Meanwhile, in a nearby twist, international travel from Canada to non-U.S. destinations surged by 4.3%, hinting that many Canadians are opting to stray from the usual destinations.

The Broader Economic Picture

Experts warn that a potential trade war could negatively impact both nations, affecting the flow of homebuilding materials and ultimately housing markets. Some analysts suggest that high tariffs on Canadian goods could disrupt the economy altogether; this gives rise to worries over decreased housing starts and ultimately rising home prices back in Canada. As noted by Global News, tariffs could create a vicious cycle of increased construction costs, affecting affordability amidst already rising problems in housing supply.

Interestingly, as we see Canadian buyers retracting, local agents are feeling the pinch too. Marsha McMahon-Jones, a Redfin Premier agent, observed not working with any Canadian clientele over the past year. Many potential buyers are waiting, hoping and perhaps praying for better U.S.-Canada relations before making any waves in the housing scene.

In this new landscape, it seems there is much to unpack. Canadian buyers, who once comprised 13% of all foreign buyers in the U.S. and spent nearly US$6 billion on real estate last year, are now reevaluating their options. As we approach the second half of 2025, the interplay between trade tensions, currency fluctuations, and overall economic health will undoubtedly continue to shape the decisions of Canadian homebuyers.