The Chilling Effect: How U.S. Trade War Rhetoric Affects Canadian Interest in American Real Estate

As the U.S. housing market begins to cool, the belligerent rhetoric emanating from the White House about potential annexation and combative trade negotiations is having a chilling effect on Canadian interest in owning American property. According to the National Association of Realtors, Canadians made up the largest share of foreign buyers of U.S. residential real estate in 2024, with 13% of the foreign purchase market – followed by China and Mexico at 11% each. In five out of the last ten years, Canadians have led foreign purchases.

Miles Zimbaluk, who came to the Phoenix area from Saskatchewan after the 2008 subprime crisis and “fell in love” with Arizona, has witnessed a significant change in the market. “I never expected to see anything like this,” he said in an interview. “People have absolutely been turned off by the talk of annexation.” The rhetoric has pushed some people to sell their second homes in Arizona, and others are deciding to hold off rather than buy.

In the first quarter of 2025, Canadians have listed more than 700 homes for sale in Maricopa County, compared to 100 homes in the same period last year. Canadians own about 30,000 properties in the county, but the data suggests that their interest is waning. Data from Realtor.com confirms that Canadians still made up the largest share of online home viewers in the first quarter, at 34.7%, but that’s down sharply from 2024, when they represented 40.7% of house-hunters.

While a slowdown in demand isn’t a huge concern for now, it’s definitely something to keep an eye on. Canadians typically buy in warmer metros with lower taxes – like Arizona and Florida – and as second-home buyers, they are more interested in higher-priced properties. As such, those market segments are being watched most closely.

The U.S. housing market is also slowing down, with sales of previously-owned homes at the slowest pace for any April since 2009, according to the National Association of Realtors. The pace of sales set that month was below the 4.06 million mark achieved in 2024, which was the worst year since 1995. In South Florida, real estate agents are “absolutely” seeing less demand from Canadians due to uncertainty and a feeling of not being welcome.

Many Canadians are motivated by factors other than politics, such as rising home prices and an unfavorable exchange rate. The “loonie” has weakened compared to the U.S. dollar in recent months, making it more expensive for Canadians to buy American goods. Additionally, the longstanding sense of America as a welcoming haven with friendly people has been damaged by the White House’s stance on South- and Central American immigrants.

“A lot of people are saying they don’t feel comfortable being in the U.S.,” Zimbaluk said. While no one is concerned for their safety, per se, he has heard of some people with Canadian license plates having nasty notes left on their windshields. “There’s just so much uncertainty,” he added. “Everyone is trying to find their own way.”

In conclusion, while the U.S. housing market may be experiencing a slowdown due to various factors, the political rhetoric coming from the White House is having a chilling effect on Canadian interest in owning American property. As a result, real estate agents and analysts are closely monitoring this trend and its potential impact on the overall housing market.