Canadian home sales just plummeted, leading to questions about how busy the spring market will be this year.

It took only a month to see the effects of the ongoing trade war with the United Sates play out across Canada’s real estate markets. Home sales dropped 9.8% in February 2025, compared to January, marking the lowest level for home sales since November 2023, said the Canadian Real Estate Association (CREA) on Monday, March 17.

New listings also tumbled 12.7% month-over-month in February, resulting in just 146,250 properties for sale by the end of February. The long-term average for that time of year is about 174,000 listings.

It’s a stark contrast to how the year began. January saw a large jump in sales and listings, but…

“Then, January 20 came along,” Shaun Cathcart, CREA’s Senior Economist said in this month’s CREA Housing Market Report, referencing U.S. President Dondald Trump’s announcement on tariffs.

75% of Canadian Markets See Housing Activity Drop

CREA said about three-quarters of all local markets—including most major markets—saw sales fall, with this trend being most pronounced in the Greater Toronto Area and Great Golden Horseshoe regions of Ontario.

The chart below shows monthly home sales are once again well below the 10-year monthly moving average.

Canadian Home Prices Also Fall in February

As Cathcart said in this month’s CREA Housing Market Report, there’s usually about a one-month lag when it comes to changes in market conditions and the impact on prices.

“Sure enough, after having been as ‘flat as a pancake’ for about a year, the MLS® Home Price Index (HPI)—the most advanced and accurate tool to gauge home price levels and trends—) had a significant and noteworthy drop between February and January,” Cathcart said.

The MLS® HPI declined 0.8% month-over-month, making it the largest decrease since December 2023.

The actual national average sale price of a home sold in February was $668,097, down 3.3% from a year ago. On a seasonally adjusted level, the average price was down 4.6% in February compared to January.

Will More Interest Rate Cuts Entice Home Buyers?

The Bank of Canada made its seventh straight rate cut on Wednesday, March 12—this time to the tune of 25 basis points, bringing the Bank’s policy rate down to 2.75%.

Economists believe the Bank of Canada will cut rates two or three more times by the summer, making it possible for aspiring home buyers to qualify for a mortgage more easily.

Homeowners with variable rates will also immediately feel the benefits of added rate cuts.

“A softer pricing environment and now lower interest rates will be a buying opportunity. If you’re looking to buy or sell a property in 2025, contact a REALTOR® in your area today,” said James Mabey, CREA Chair and a REALTOR® in Edmonton, Alberta.

Of course, it’s unclear how the uncertainty caused by the ongoing trade war with the U.S. will play out as buyers may not be willing to jump off the sidelines, especially with jobs on the line.