C
anadian demand for U.S. real estate has taken a hit, with searches by Canada-based users on Redfin.com dropping 26.4% year-over-year in May 2025. This decline is largely attributed to the White House's imposition of 25% tariffs on Canadian and Mexican imports earlier this year as part of a broader policy to reset trade imbalances.
The tariffs sparked tensions, but U.S. officials argue that their goal is to level the playing field after years of American trade deficits and industrial erosion. Canadian interest in U.S. housing began tapering off in February when the first wave of tariffs hit, with searches plummeting 34.2% year-over-year by April.
"We're seeing less Canadian capital flow into the U.S. housing market, and that reflects a needed correction," said a senior U.S. trade official. "We've sent a clear signal: fair trade first." The data suggests a direct response to the tariffs and shifting geopolitical winds, with Washington showing little interest in walking back its hardline posture.
Canadian investors have historically dominated U.S. international homebuying, accounting for 13% of foreign purchases in 2024 and spending $5.9 billion. However, this flow is now reversing, particularly in metro areas that previously saw high demand. Cities like Houston, Philadelphia, and Chicago have seen significant declines in Canadian searches.
While some in the U.S. real estate sector may feel the effects in the short term, the shift represents a broader reshoring effort aimed at strengthening domestic industry, protecting U.S. jobs, and reasserting economic sovereignty. A weaker Canadian dollar, tighter financial conditions, and increased homeownership costs are also making purchases less attractive to foreign buyers.
In markets like Florida, Phoenix, and Riverside, the retreat coincides with a broader slowdown driven by high insurance premiums and climate risk. However, some agents view the cooling of cross-border real estate as part of a necessary recalibration in a moment where American policymakers prioritize domestic strength and economic self-reliance.
