CREA reports home sales fell in February amid tariff uncertainty

A real estate sign is shown in Vaughan, Ont. on Thursday Sept. 12, 2024. THE CANADIAN PRESS/Paige Taylor White

OTTAWA — Home sales in February fell to their lowest level in more than a year as homebuyers stayed on the sidelines amid the uncertainty created by the trade war with the United States, the Canadian Real Estate Association said on Monday.

Home sales in February were down 10.4 per cent compared with the same month last year, while on a seasonally adjusted basis, home sales were down 9.8 per cent compared with January.

“The moment tariffs were first announced on Jan. 20, a gap opened between home sales recorded this year and last,” said Shaun Cathcart, senior economist at CREA.

“This trend continued to widen throughout February, leading to a significant, but hardly surprising, drop in monthly activity,” he said in a statement.

CREA says it was the lowest level for home sales since November 2023 and the largest month-over-month drop since May 2022, which is when the Bank of Canada started a series of aggressive rate hikes to fight inflation.

The pullback was not a surprise given the political uncertainty brought on by the Donald Trump presidency, said Phil Soper, president of Royal LePage.

He said the company could see the downturn in sales happening day by day, and that it really took off in February once perspectives fully shifted.

“In the first few days of the Trump presidency, I think there was still some disbelief that the kinds of bombastic statements he was making would actually translate into aggressive policy against a friend and neighbour,” said Soper.

“By February, people had settled into a worried acceptance to the fact that the trade war was reality, and we saw volumes start to decline.”

The month did also see heavy winter storms hit the Toronto area and other parts of southern Ontario, weighing on sales, but it would have had only a minor effect on the month, said Soper.

“People will avoid going out and looking at home for a week, but if they decided that that’s the time that their family needs to move, they move, they get out there and they do the transaction.”

Instead, it’s largely uncertainty that’s holding back sales, even as measures like savings and employment remain fairly strong, he said.

“It’s confidence. People’s confidence to make major decisions has been shaken by the Trump White House.”

The pullback in sales was most pronounced in the Greater Toronto Area, but it was fairly broad-based with declines in three quarters of local markets and almost all large markets, said CREA.

The association also says new listings fell 12.7 per cent month-over-month, following a surprise increase in January.

Total listings were up 13.1 per cent from last year at around 146,000, but still below the long-term average for the time of year of 174,000 listings.

The actual national average sale price of a home sold in February was $668,097, down 3.3 per cent from a year ago. Seasonally adjusted, the average price was down 4.6 per cent from January.

CREA’s own home price index, which aims to represent the sale of typical homes, fell 0.8 per cent from January and was down one per cent from last year.

As with listings, price softness was most notable in the Toronto region, where the index fell 1.5 per cent from last month.

The retreat on prices, combined with another interest rate drop from the Bank of Canada last week, is helping create buying opportunities for some, the association said.

TD senior economist Leslie Preston said in a note that the rate cut should provide some support for housing at the margins, but it will take more than that to spur a turnaround.

“As long as the U.S. keeps the threat of punitive tariffs alive, confidence in the housing market is likely to be under a cloud.”

This report by The Canadian Press was first published March 17, 2025.