Canadians are cooling on the U.S. housing market

Between April 2024 and March 2025, Canadian homebuyers spent $6.2 billion on U.S. real estate purchases, making up 14% of all foreign homebuyers, according to data from the National Association of Realtors (NAR). 

While the total spend of Canadian buyers is up from $4.4 billion in the prior 12-month period, data from Redfin, which was acquired by Rocket Companies in March, shows that demand from Canadian buyers is weakening. 

In a report released Monday, Redfin stated that the number of Canadians searching Redfin.com for homes to buy or rent dropped 19.5% year-over-year in August. According to Redfin, the number of Canadians searching for U.S. properties initially began declining in February, when the Trump administration first announced its plans for tariffs, with the largest annual decrease coming in April, when searches declined by 34.2%. 

Fewer rental opportunities means fewer buyers

Juan Castro, an Orlando, Florida-based Redfin agent, has noticed similar trends within his own business. Prior to 2022, Castro said of the roughly 50 to 80 transactions he is a part of each year, between five and seven involved Canadian buyers and sellers. However, since mortgage rates began rising in mid-2022, he has noticed a decrease in demand from Canadians.

“Typically Canadians are looking to purchase a second home or an investment property they can rent out on Airbnb or VRBO here,” Castro said. “What happened though is that when mortgage rates went up in 2022, the investment began making less sense for those Canadian clients.” 

In August, Redfin data shows that there was a 23% yearly decrease in the number of Canadian homebuyers searching for properties in the Orlando metropolitan area. In total, Canadian home searches have fallen in 46 of the 50 largest U.S. metros, with the largest declines in West Palm Beach, Florida (26.6%), followed by Anaheim, California (-26%), Columbus, Ohio (-26%), Detroit (-25.5%) and Los Angeles (-25.5%). 

The only metros with annual increases in Canadians searching for properties were Kansas City, Missouri (13.6%), Nashville (8.5%), Jacksonville, Florida (3.3%) and Fort Worth, Texas (1.5%). 

Affordability is a cross-border challenge

While U.S. consumers are celebrating mortgage rates coming down into the lower 6% range, Castro said Canadian buyers borrowing funds are still looking at rates of 8% to 8.25%. In addition, these Canadian buyers also must put down 25% as a down payment, far more than what most domestic homebuyers put down for a down payment. 

“So, it is costing them more money,” Castro said. “When you add this on top of Airbnb and VRBO occupancy going down because people are no longer concerned about COVID and are willing to stay at some of the resorts instead of having a house to themselves, they are not getting the same out of the investment that they once were.” 

Castro added that rising homeowners insurance costs and a weaker Canadian Dollar are also hampering affordability for Canadian buyers. However, according to the Royal Bank of Canada, many popular housing markets in the U.S. are far more affordable than those in Canada. According to data from Properstar.ca, on average properties in Toronto are priced at $9,880 per square meter, while the average in Vancouver is $12,281 and Montreal is $6,975. In comparison, San Diego is $5,870 per square meter, Naples, Florida, is $4,900, Honolulu is $6,600 and Los Angeles is $4,890.

“The majority of Canadians are purchasing properties as vacation homes and for rental income,” Hatim Tichout, a regional advisor, cross-boarder banking at RBC, said. “In Canada right now, the return on rental properties is just not there — prices are high, interest rates are high and it is almost impossible to find something that will create positive cash flow. In contrast, in the U.S. there are still many markets where prices are lower and the demand for properties to rent is there.” 

Despite the decrease in activity from Canadian consumers experienced by Castro, Florida remains the most popular state for Canadians to purchase properties in. Tichout added that the warmer climate available to Canadians in many U.S. markets is a draw, as many Canadian buyers are looking for warmer vacation home destinations. 

Data from NAR’s 2025 International Transactions Report shows that 48% of the properties purchased by Canadians in the year ending March 2025 were bought in Florida. Other popular states for Canadian buyers included Arizona (12%) and California (9%). 

Migration of the snowbirds

While affordability remains a challenge, Castro said, at least in his market, home prices are remaining relatively flat. This, however, is triggering some more action among Canadian homesellers. 

“For home sellers, their property was worth $600,000 in May 2022 and the same today in September 2025. Then it is costing them more to keep the property due to rising insurance costs, plus there is all this noise about what might happen with tariffs and the housing market, so some are deciding the risk isn’t worth it, so they are selling,” Castro said.

Tichout is also seeing this trend, however he noted many of these Canadian sellers end up purchasing properties in other states.

“We have seen an increase in calls from snowbirds who have properties in the U.S. who are looking to sell,” Tichout said. “But they are typically looking to move to another state or area with lower property taxes and lower insurance premiums. We’ve seen this a lot lately with what happened with the insurance market in Florida.” 

Florida remains popular

According to Castro, at least in the Orlando market, the Canadians who are deciding to purchase right now are doing so because they enjoy vacationing in the area and feel that purchasing a property is a far better investment than spending tens of thousands of dollars on accommodation and eating out every trip.

“We see a lot of families — parents, a few young kids, and grandparents,” Castro said. “They realize that they are spending $20,000 or more to be in Florida for a few weeks each year, and that prompts them to take the risk and purchase a vacation property because not only will they save money on accommodation, they can rent it and make money.” 

Looking ahead, Castro believes lower mortgage rates and a more certain environment surrounding tariffs would lead to an uptick in Canadian buyers.

“I think on the surface, rates would make a difference, but also seeing what will happen with tariffs and how things play out will also help,” Castro said. “And then just expenses — insurance has gone up a lot over the past few years, but the situation seems to be improving, so I think if expenses can come down a little bit, I think you’ll see more Canadians, but also more people in general being willing to park their money in Florida real estate because we have so many great things to offer.”