A frustrating thing about today’s housing market is the paltry number of homes for sale. Would-be buyers outnumber sellers, even as high mortgage rates strain affordability.After all, the government paid people to buy houses after the 2008 financial crisis, when there weren’t enough buyers. Now, it could pay people to sell houses when there aren’t enough sellers.
Chen expects more homes to come to market “once rates come down to the 5% range.” Meanwhile, the government could use tax incentives to prod people into selling homes even whenWhen you sell a house for more than you paid, the profit is a capital gain. You’re taxed on that capital gain if it’s over $250,000 for single tax filers or $500,000 for joint filers. A bill to double those amounts was introduced into the House in March by Reps. Jimmy Panetta, D-Calif., and Mike Kelly, R-Pa.
Homeownership has become an older person’s game: 56% of homeowners are older than 55, compared with 48% a decade ago. “As older owners stay in their homes longer than usual, their homes do not turn over to a younger generation, thus limiting an important and traditional source of supply,” according to the NAR-commissioned report, “Tax Policy and Single-Family Home Supply: How Targeting Tenure, Capital Gains, and Investor-Owners Would Change the Market.
This would be a more generous tax credit than the ones that were handed out to home buyers from 2008 to 2010. Those credits were intended to boost home sales, and they were modestly successful.Another proposal discussed by Hanson and Brannon: a limited-time, 50% reduction in the capital gains tax rate for small-time landlords who sell single-family rental properties to first-time home buyers. This measure would increase the supply of homes for sale by 67,000 to 146,000, they estimate.