Canada’s Spring Housing Market Stalls Amid Tariff Uncertainty, But Buyers May Find Opportunities

Canada’s spring housing market, typically a time of heightened activity, is showing signs of stagnation as uncertainty surrounding U.S. tariffs weighs on buyers and sellers alike. With home sales dropping 9.8% annually in February and prices declining by 3.3%, experts warn that the market is feeling the effects of economic instability caused by U.S. President Donald Trump’s trade policies.

According to the Canadian Real Estate Association (CREA), February saw the lowest home sales in over a year, with newly listed properties also falling by 12.7%. The decline coincides with Trump’s inauguration and subsequent tariff threats, which have caused widespread economic anxiety. “The spring housing market is dead on arrival,” said mortgage expert Clay Jarvis of NedWallet Canada, adding that continued uncertainty in March and potential new tariffs in April could keep buyers hesitant.

The cooling market contrasts with earlier predictions of a hot spring season, as the Canadian economy had entered 2025 on strong footing. With inflation near the Bank of Canada’s 2% target and six consecutive interest rate cuts making borrowing more accessible, many expected increased market activity. However, economic fears have overshadowed these advantages, with potential buyers reluctant to commit to mortgages while job security remains uncertain. “People want homes, but they don’t want to be locked into a mortgage when they don’t know if they’ll have a job in six months,” Jarvis explained.

For sellers, the shift in market conditions means expectations may need to be adjusted. Rishard Rameez, CEO of Toronto-based realty group Zown, noted that many homeowners had been waiting for lower interest rates before listing their properties, but the anticipated spring market surge may not materialize. “If the situation continues as it has for the past few weeks, we’re unlikely to see the usual bidding wars and over-asking price sales,” Jarvis said. Sellers unwilling to negotiate on price may face prolonged market stagnation.

Despite the challenges, some buyers could benefit from the downturn. Increased inventory levels and reduced competition mean those with stable finances may have more negotiating power. “This could be a great time for financially secure buyers to enter the market and find the best deal for them,” said Shawn Zigelstein, a broker at Royal LePage. Additionally, mortgage rates are at their lowest levels since 2022, with five-year fixed rates available at 3.89% and variable rates as low as 3.95%.

Millennial and Gen Z buyers, in particular, may find opportunities in the condo market, which has been in a slump for the past six months. “With condo inventory at high levels, first-time buyers could find good deals,” noted Penelope Graham, a mortgage expert at Ratehub.ca. Meanwhile, those looking to upsize may also benefit, as taking a minor loss on a smaller home could result in significant savings on a larger property.

While uncertainty dominates the market now, experts believe it will eventually rebound. “Most money is made in slower markets,” Zigelstein emphasized. “Those willing to be decisive and take a short-term risk could see significant gains in the years to come.”