Residential Real Estate News
Canadian Home Sales Slide in February Amid U.S. Trade Tensions
Tariff Uncertainties Keep Canadian Home Buyers Sidelined
Canadian home sales saw a significant decline from January to February 2025, as cautious buyers stepped back during the first full month of the ongoing trade war with the United States.
According to data from Canadian MLS Systems, national home sales dropped 9.8% month-over-month in February--the lowest level recorded since November 2023 and the steepest monthly decline since May 2022.
"The gap between this year's and last year's sales activity opened as soon as tariffs were announced on January 20," said Shaun Cathcart, Senior Economist at the Canadian Real Estate Association (CREA). "That gap only grew wider through February, culminating in a substantial, though unsurprising, slowdown. We're already seeing that impact through renewed price weakness, particularly across Ontario's Greater Golden Horseshoe region."
The drop in sales was widespread, affecting about 75% of local markets, including nearly all major urban centers. The sharpest declines were seen in the Greater Toronto Area and surrounding Golden Horseshoe communities.
New listings also fell sharply, down 12.7% compared to January, effectively erasing the unexpected spike seen at the start of the year.
With both sales and listings declining at similar rates, the national sales-to-new listings ratio inched up to 49.9% in February, from 48.3% in January. Historically, a ratio between 45% and 65% suggests a balanced housing market. The long-term national average sits at 55%.
At the end of February 2025, there were 146,250 homes listed for sale across Canadian MLS® Systems--up 13.1% year-over-year, but still well below the seasonal average of around 174,000 listings.
The national inventory level also rose, reaching 4.7 months of supply, up from 4.1 months in January. This approaches the long-term average of five months. Markets are typically considered seller-favored below 3.6 months of inventory, and buyer-favored above 6.5 months.
Home prices softened alongside demand. The National Composite MLS Home Price Index (HPI) declined 0.8% from January to February 2025 -- the largest monthly drop since December 2023.
