‘Trump effect’ continues to exert a powerful hold on Canadian housing market outlook
The US president’s decisions over the past 16 months have weighed down the market – and that trend looks set to continue for the foreseeable future
By Fergal McAlinden, 20 Apr. 2026
Five-year Government of Canada bond yields wobbled on Monday morning amid a jump in inflation and fresh uncertainty over the future of the US-Iran war.
The national inflation rate rose to 2.4% in March, according to Statistics Canada, confirming that the continuing conflict in the Middle East is jolting prices and potentially putting interest rate hikes on the Bank of Canada’s radar.
The eruption of that war at the end of February was yet another curveball for the Canadian economy and housing market after years of volatility sparked by external factors: the outbreak of the COVID-19 pandemic in 2020, rapid rate hikes amid an inflation spike in 2022, and economic chaos spurred by the introduction of Donald Trump’s tariff regime last year.
Economic unpredictability, chaos keep homebuyers on tenterhooks
If the housing market is to gather pace between now and the end of 2026, most experts say a permanent resolution to that conflict – which appeared unlikelier on Monday morning as tensions in the Strait of Hormuz continued – will be a crucial step.
But the tariff crisis and the Iran war underline that things are rarely quiet under a Trump administration, and the likelihood of more unpredictability even if the Iran conflict winds down means it’s difficult to see serenity emerging in the Canadian housing outlook anytime soon.
“I can’t imagine that it’s going to rebound too strongly this year,” Joel Fox (pictured top), co-founder and chief operating officer of Ownright, told Canadian Mortgage Professional. “I think the only thing that we can predict with Trump is that he’s going to do something else. What that is, we don’t know.
“Eventually, the key data points in the market [like home prices] might get down to a point that starts drawing buyers in even though things are so unpredictable with decisions being made south of the border. But I don’t think we’re going to see any major bounce back or anything like that.”
The onset of Trump’s global tariff war roiled financial markets last year and raised prospects of a sharp economic downturn in Canada.
That also snuffed out chances of a hoped-for housing market recovery, and activity has remained sluggish into this year as Canadians wait to see how the Iran conflict will impact inflation, oil prices, and interest rates.
‘People are never going to get comfortable’
Trump’s freewheeling approach isn’t likely to soothe those hoping for a steadier outlook for the global economy through 2026 – and further drama on the tariff front could be ahead with the early-July deadline looming for review of the Canada-US-Mexico (CUSMA) free trade agreement.
The US president is a “wild card” for the economic and housing market outlook, Fox said. Earlier in the year, his threats to annex Greenland sent international stock markets into the red, and uncertainty about what else he has in store could keep many Canadians’ homebuying plans on ice.
“If you continue to have Iran conflicts or Greenland-type things coming up, people are never going to get comfortable – and I think they need to be a little bit more comfortable and confident to step back in,” Fox said.
“I think there are two core dynamics at play. There are the market conditions, core data points that we would look at from a real estate perspective, but [also] the Trump effect. What’s he going to do next? And if we get to the other side of a positive resolution in the Iran conflict, I’d be surprised if anyone felt like something else wasn’t going to pop up.”
Last week, the Canadian Real Estate Association (CREA) downgraded its forecast for 2026 national home sales, citing “global economic uncertainty” as part of the reason for that change.
A jump in fixed mortgage rates because of inflation also caused the revision, according to CREA senior economist Shaun Cathcart.
Fox expects the Trump effect to continue exerting a powerful influence over the Canadian housing market for the foreseeable future.
“To me, the biggest argument that you could make that the market isn’t going to rebound is that the decisions that he’s made have shown to have such an impact on the real estate market here,” he said. “And it’s hard to imagine he’s not going to keep down that path, even though we don’t necessarily know what he’s going to do next.”
www.mpamag.com/ca/mortgage-industry/industry-trends/trump-effect-continues-to-exert-a-powerful-hold-on-canadian-housing-market-outlook/572349
