Declining Canadian Interest in U.S. Real Estate Amid Political Tensions and Economic Challenges
The growing friction between the White House and Canada, coupled with aggressive trade negotiations, is dampening Canadian enthusiasm for purchasing U.S. properties. This cooling demand comes at a time when the American housing market itself is showing signs of slowdown.
Canadian Buyers Lead Foreign Real Estate Investments but Face New Barriers
According to the National Association of Realtors, Canadians have traditionally been the most prominent foreign buyers of residential real estate in the United States. In 2024, they accounted for 13% of foreign purchases, outpacing buyers from China and Mexico, each at 11%. Over the past decade, Canadians have led foreign acquisitions in five distinct years.
However, this trend is facing an unprecedented challenge. Belligerent rhetoric from U.S. officials hinting at the annexation of Canada, alongside tense trade disputes, has caused many Canadian investors to rethink their cross-border property purchases.
Real-Life Impact: Canadian Sellers and Hesitant Buyers
Miles Zimbaluk, founder of real estate and insurance firms catering to Canadians in Arizona, has witnessed firsthand the shift in market sentiment.
“People have absolutely been turned off by the talk of annexation," Zimbaluk revealed. He noted a significant uptick in listings, with Canadians putting over 700 homes on sale in Maricopa County in Q1 2025, compared to just 100 during the same period last year. Despite owning approximately 30,000 properties in that county, many Canadian homeowners are reluctant to buy more, or are even selling their second homes.
This hesitance is further confirmed by data from Realtor.com, which shows a sharp decline in Canadian engagement.
- In Q1 2025, Canadians accounted for 34.7% of online home viewership for U.S. properties
- This marks a drop from 40.7% in 2024, signaling waning interest
Jiayi Xu, an economist at Realtor.com, notes that Canadians generally prefer warmer, low-tax metros such as Arizona and Florida, targeting higher-priced properties as second homes. She emphasizes monitoring these market segments closely given the changing dynamics.
U.S. Housing Market Shows Signs of Weakness
The shrinking Canadian interest compounds difficulties in the U.S. housing market, which has weakened considerably.
- In April 2025, sales of existing homes hit their slowest pace for any April since 2009, says the National Association of Realtors.
- The 2024 annual sales figure was 4.06 million units, the lowest since 1995.
South Florida, heavily reliant on Canadian buyers during the winter months, is feeling the pinch.
Jeff Lichtenstein, owner and broker at Echo Fine Properties in Palm Beach, confirms:
“We are absolutely seeing less demand from Canadians. There’s a sense of uncertainty and a feeling of not being as welcome.”
He points out that ongoing negative U.S. news coverage harms tourism and real estate buying sentiment, especially in popular destinations.
Canadian Economy Plagued by Tariffs and Currency Fluctuations
Political strife is not the sole factor impacting Canadian investments in U.S. real estate. Economic forces weigh heavily as well:
- Elevated tariffs due to worsening U.S.-Canada trade relationships have dragged the Canadian economy toward a trade war-induced recession — expected to last through 2025 unless a resolution occurs, according to Oxford Economics.
- Tariffs have increased job losses and consumer prices, reducing disposable income and dampening home-buying enthusiasm.
- The weakening Canadian dollar (loonie) relative to the U.S. dollar makes purchasing American properties more expensive for Canadians.
These factors encourage Canadians to either sell their U.S. properties while prices are high or delay new purchases.
Changing Perceptions: From a Welcoming Haven to Growing Uncertainty
Long-held notions of the U.S. as a welcoming and friendly destination have been eroded amid shifting political climates.
Lichtenstein notes that recent U.S. policies regarding South and Central American immigrants are impacting regions like Miami, compounding challenges for the Florida real estate market.
Zimbaluk adds:
“Many Canadians say they don’t feel comfortable being in the U.S. While safety isn’t a primary concern, reports of hostility such as rude notes on vehicles with Canadian plates are surfacing.”
This climate of uncertainty has many Canadians searching for alternatives or pausing cross-border investments altogether.
What Lies Ahead for Canadian Buyers and the U.S. Housing Market?
- Monitoring evolving trade negotiations and political relations between Canada and the U.S. is critical for buyers and real estate professionals.
- The U.S. housing market outlook depends heavily on foreign buyer participation, especially in key markets like Arizona, Florida, and California.
- Economists urge vigilance over currency fluctuations, policy changes, and consumer confidence to anticipate future shifts in demand.
For Canadians considering U.S. real estate investment, understanding these multifaceted challenges is essential to making informed decisions in 2025 and beyond.
For further insights into foreign investment trends and how trade policies influence real estate, visit the National Association of Realtors Foreign Investment Report.