More Homes on the Market Act

The 'More Homes on the Market Act' (S. 3332) was introduced in the Senate on December 3, 2025, and subsequently referred to the Committee on Finance. This bill proposes to amend the Internal Revenue Code of 1986 to increase the exclusion of gain from the sale of a principal residence from $250,000 to $500,000 for individuals and from $500,000 to $1,000,000 for joint filers, with an adjustment for inflation after 2025. The bill is currently in the early stages of the legislative process, with no further action since its referral to committee. This bill does not involve direct government funding or appropriations. Instead, its mechanism is a tax incentive designed to reduce the capital gains tax burden on homeowners selling their primary residences. The intent is to incentivize more home sales, thereby increasing housing market transaction volume. This could indirectly benefit homebuilders by increasing demand for new homes, home improvement retailers through increased renovation activity, and financial institutions involved in real estate transactions, such as mortgage lenders. Structural beneficiaries, if this bill were to become law, would include homebuilders like D.R. Horton, Inc. ($DHI), Lennar Corporation ($LEN), Toll Brothers, Inc. ($TOL), PulteGroup, Inc. ($PHM), and KB Home ($KBH), as well as home improvement retailers such as The Home Depot, Inc. ($HD) and Lowe's Companies, Inc. ($LOW). Financial institutions with significant mortgage and real estate lending operations, including JPMorgan Chase & Co. ($JPM), Bank of America Corporation ($BAC), and Wells Fargo & Company ($WFC), could also see increased activity. However, the bill's current status means these are potential long-term impacts, not immediate effects. Recent market data for homebuilders shows mixed performance. While $DHI, $LEN, $TOL, $PHM, and $KBH have all experienced positive 7-day changes ranging from +1.64% to +6.93%, their 30-day changes are negative, ranging from -5.44% to -15.08%. Similarly, home improvement retailers $HD and $LOW show modest positive 7-day changes (+0.97% and +1.13% respectively) but negative 30-day changes (-9.69% and -7.66%). Financial institutions $JPM, $BAC, and $WFC have seen positive 7-day changes (+4.12% to +6.58%) and relatively stable to slightly positive 30-day changes. The overall market performance for these sectors does not indicate a direct reaction to S. 3332, given its early legislative stage. The bill's path to enactment is long. It must pass through the Committee on Finance, then the full Senate, and subsequently the House of Representatives, before potentially being signed into law by the President. The existence of related bills, including companion bill HR1340, indicates a broader legislative interest in this policy area, but does not guarantee passage.