By Paul Vieira

OTTAWA--Canadian existing-home sales fell in March, and the forecast is now for activity to stagnate in 2025 as consumers and businesses deal with the fallout from President Trump's upheaval in trade policy.

The Canadian Real Estate Association said existing-home sales dropped 4.8% in March from February, and that sales activity - on an unadjusted basis - fell 9.3% from a year ago.

The real-estate data indicate that benchmark house prices, calculated in a similar fashion to the S&P CoreLogic Case-Shiller National Home Price Index, dropped 1% in March from the previous month, and declined 1.9% from a year earlier. Home prices still remain about 30% above levels from a half-decade ago.

The association has revised its 2025 forecast, and now expects sales to be flat for the year - a sizable downward revision from its call in January for sales to rise 8.6% on the expectation consumers would capitalize on lower interest rates. "In short order, we've gone from a slam dunk rebound year to treading water at best," said Shaun Cathcart, an economist at the real-estate association.

President Trump's trade-policy upheaval has weighed on real-estate activity, as consumers rethink big purchases and scale back day-to-day spending due to worries that tariffs could fuel job losses and lift prices higher. The quarterly Bank of Canada survey of consumers indicated that two-thirds of households expect a recession in the coming 12 months, a rise from a 47% reading in the previous quarter. The central bank survey also pointed to heightened worries about job security, especially in the commodities and manufacturing sectors.

Most economists expect the central bank to hold its main interest rate unchanged at a decision on Wednesday, as Bank of Canada officials are preoccupied about inflation accelerating due to the U.S.-Canada trade conflict.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

April 15, 2025 09:23 ET (13:23 GMT)

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