Conservative Tax Policy Is Coalescing Around the “More Homes On The Market Act”

Housing supply has emerged as a central concern among conservative tax and economic policy experts. Across multiple outlets and institutions, analysts are reaching the same conclusion. The tax code discourages homeowners from selling, reduces housing inventory, and drives prices higher. While the commentary continues to grow, Congress already has a clear solution. The U.S. House version is H.R. 1340, and the Senate companion bill is S. 3332. Together, they are titled the “More Homes On The Market Act.”

The policy problem is straightforward. Federal law allows homeowners to exclude a portion of capital gains when selling a primary residence. That exclusion has not been meaningfully updated in decades, despite sharp increases in home prices. As a result, many homeowners now face large tax bills if they sell. This creates a powerful incentive to stay put, even when moving would otherwise make sense. The consequence is fewer homes for sale and tighter housing markets.

Adam Michel of the Cato Institute has explained how the capital gains tax locks Americans into their homes. When selling triggers a substantial tax liability, homeowners delay listing or avoid selling altogether. That behavior directly limits housing supply and worsens affordability pressures, especially in high-cost regions.

Dan Mitchell of The Center for Freedom and Prosperity reinforces the broader economic principle behind this dynamic. Taxes change behavior. When policymakers increase the cost of a transaction, fewer people engage in it. In housing markets, that means fewer sales, fewer listings, and higher prices for buyers.

The same theme appears in a recent National Review analysis of the middle-class housing squeeze. Limited inventory and rising prices have made homeownership increasingly difficult for working families. One contributor to this shortage is the tax penalty homeowners face when they consider selling a home that has appreciated over time.

The Wall Street Journal opinion piece by Steve Moore of the Committee to Unleash Prosperity makes the argument even more plainly. Selling a home has become too taxing. High transaction costs discourage mobility, reduce listings, and keep supply artificially constrained.

The “More Homes On The Market Act” is designed to address exactly this problem. In the U.S. House, H.R. 1340 would raise the capital gains exclusion for the sale of a primary residence and index it for inflation. This change would reduce the tax burden on sellers and remove a major barrier to listing a home.

The Senate version, S. 3332, advances the same policy objective and has been referred to the Senate Finance Committee. Together, the House and Senate bills respond directly to the concerns raised by conservative tax experts who have highlighted how current law distorts housing markets.

This legislation matters because housing supply affects affordability, economic mobility, and opportunity. When homeowners are discouraged from selling, inventory shrinks, prices rise, and families are left with fewer choices. Workers are also less able to move for better jobs when selling a home carries a significant tax cost.

The “More Homes On The Market Act” offers a practical, market-based fix. It modernizes an outdated tax rule and realigns incentives so that more homeowners feel comfortable selling. More listings mean more choice for buyers and a healthier housing market overall.

As conservative tax experts continue to converge on the same diagnosis, the policy path forward is clear. Congress does not need to invent a new solution. The legislation already exists. Passing the “More Homes On The Market Act” would directly address one of the key drivers of the housing supply shortage and help restore balance to the market.