This study investigates the effect of hysteresis on hygrothermal performance of CLT walls under dynamic climate conditions, with a particular focus on high relative humidity (RH) levels and rainwater leakage. To achieve this, a hygrothermal model was developed in Python, this model has incorporated hysteresis effect of building materials, solar radiation, and wind-driven rain (WDR) as a key environmental load. The model was validated using experimental data from an 18-month field study on a CLT wall in Vancouver. Without hysteresis, the simulated moisture content (MC) showed mean absolute errors (MAEs) of 0.37% at the exterior surface and 2.12% at the interior side of the CLT layer compared to the measurements. Incorporating hysteresis improved MC predictions, reducing the MAEs to 0.34% (exterior) and 1.85% (interior). Temperature and RH predictions were also in good agreement with experimental data, although the inclusion of hysteresis had negligible impact on these parameters. Following validation, a one-year simulation under future climate conditions was conducted to assess the effect of hysteresis under dynamic climate conditions, with particular focus on rainwater leakage. Results indicated that hysteresis had minimal influence when rain penetration was absent. However, when rain leakage occurred, MC discrepancies increased, with the MAE rising to 2.36% and a maximum difference of 6.48% between simulations with and without hysteresis. These findings highlight the importance of considering hysteresis in hygrothermal modeling, particularly under conditions where rainwater penetration is a critical factor.