Tax Experts Weigh in on More Homes on the Market Act

June 16, 2026 - 02:11

Tax policy experts and housing advocates are rallying behind a new legislative proposal aimed at freeing up the nation's tight housing market. The More Homes on the Market Act, which has drawn attention from both industry groups and policymakers, would double the current home equity tax exclusion for single filers from $250,000 to $500,000, and for married couples from $500,000 to $1 million.

During a recent panel discussion, analysts argued that the current exclusion limits, set in 1997, have not kept pace with soaring home values. Many homeowners, particularly empty-nesters and retirees, are reluctant to sell because they would face a massive capital gains tax bill on their appreciated property. This "lock-in effect" keeps millions of homes off the market, worsening supply shortages and driving prices higher for younger buyers.

Panelists noted that updating the exclusion would provide immediate financial relief for families looking to downsize or relocate. By reducing the tax penalty on selling, the policy could encourage a wave of listings, increasing inventory and moderating price growth. Critics, however, warn that the change could primarily benefit wealthy homeowners in high-cost areas and reduce federal revenue.

Despite these concerns, the proposal has gained bipartisan interest as a practical, market-based solution. Supporters emphasize that it does not involve new government spending or complex regulations. Instead, it simply adjusts an outdated tax threshold to reflect modern real estate realities. As the housing crisis deepens, the More Homes on the Market Act is emerging as a rare point of consensus among experts who agree that unlocking trapped equity is key to restoring balance to the market.