40 Conservative Leaders Call for Vote on the “More Homes on the Market Act”

Washington has spent years talking about housing affordability. Here is a simple, bipartisan reform that would actually help.

This week, the Center for a Free Economy organized and led a coalition letter to Speaker Mike Johnson and Senate Majority Leader John Thune urging immediate action on H.R. 1340 and S. 3332, the “More Homes on the Market Act.” The legislation fixes an outdated tax rule that is quietly choking off housing supply and making it harder for middle-class families to buy homes.

The effort builds directly on the case made in a recent National Review op-ed written

by CFE President Ryan Ellis, “How to Alleviate the Middle-Class Crunch on Homeownership,” which outlined how Washington’s failure to adjust the home sale capital gains exclusion for inflation is fueling today’s affordability crisis.

An Inflation Problem Washington Created

Under current law, homeowners may exclude up to $250,000 in capital gains from the sale of a principal residence, or $500,000 for married couples filing jointly. Those thresholds were set in 1997. They have never been adjusted for inflation.

In real terms, the value of that exclusion has been cut roughly in half.

The result is predictable. Long-time homeowners who bought decades ago are now facing tax bills on what are often merely inflationary gains. That creates a powerful “lock-in” effect. Instead of selling and downsizing, relocating, or moving closer to family, many owners stay put to avoid the tax hit.

Fewer homes come on the market. Supply tightens. Prices rise. Younger families get squeezed out.

H.R. 1340 and S. 3332, the “More Homes on the Market Act,” correct this by restoring the real original value of the exclusion and indexing it for inflation going forward. That is not a tax giveaway. It is basic tax fairness.

Broad Coalition, National Attention

The coalition letter was signed by 40 conservative leaders and organizations, including Grover Norquist of Americans for Tax Reform, Steve Moore of the Committee to Unleash Prosperity, Brandon Arnold of National Taxpayers Union, and many others across the free-market policy community.

The letter urges congressional leadership to take up H.R. 1340 and S. 3332 without delay. It explains plainly that the outdated exclusion “punishes long-time homeowners for selling their homes” and worsens the housing supply crunch.

The effort quickly drew national media attention.

As reported in a “First Look” item, a high-profile group of low-tax advocates is backing bipartisan legislation that would double the current capital gains exclusion for the sale of a house. The activists warned that “in far too many cases, Americans who bought decades ago now face taxes on what are often merely inflationary capital gains,” adding that the tax burden discourages home sales and makes it harder for millennial families to buy homes.

Housing affordability is not only about mortgage rates or zoning rules. It is also about how the tax code shapes incentives. When Washington penalizes mobility, it restricts supply.

From Op-Ed to Action

The National Review op-ed laid out the economic case. The coalition letter translates that case into action.

If Congress is serious about expanding homeownership and easing pressure on the middle class, updating the capital gains exclusion should be an obvious step. The policy is bipartisan. The economic logic is straightforward. The need is urgent.

It is time for the U.S. House and the Senate to put the “More Homes on the Market Act” up for a vote and let more homes come onto the market.