More Homes on the Market Act
Summary
The More Homes on the Market Act is an early-stage Senate bill (S. 3332) that would double the capital gains exclusion on primary residence sales to $500,000 for individuals and $1,000,000 for married couples, with inflation indexing. Filed December 3, 2025, the bill has been referred to the Senate Finance Committee and has not advanced. The limited legislative momentum means near-zero near-term market impact despite the structural benefit to homebuilders and mortgage banks if passed.
See which stocks are affected
Key takeaways, market implications, full AI analysis, and connected signals are available to HillSignal members.
Already have an account? Log in
Key Takeaways
- 1.S. 3332 is an early-stage Senate bill with zero legislative progress since December 2025 — no hearings, no markups, no floor votes
- 2.The bill would double capital gains exclusions on home sales but does not authorize any spending; it reduces tax revenue instead
- 3.Luxury homebuilder Toll Brothers (TOL) is the most structurally exposed beneficiary if the bill were enacted, but passage probability remains very low
- 4.Current market price action across homebuilders (7-day decline of 5-8%) is unrelated to this legislation and reflects broader sector selling
- 5.Retail investors should not trade this bill — there is no legislative catalyst in sight and no scheduled action
Market Implications
The More Homes on the Market Act has zero current market impact. Homebuilder stocks (DHI $151.65, LEN $88.71, TOL $139.57, PHM $120.71, KBH $52.30) have been declining sharply over the past week (5-8% losses) on a sector-wide basis that reflects changes in mortgage rate expectations and broader market sentiment, not legislative catalysts. Mortgage bank stocks BAC ($52.88) and WFC ($81.51) are flat to slightly positive over the same period, consistent with bank sector trends. Investors should ignore S. 3332 for trading purposes until and unless the Senate Finance Committee schedules a hearing or markup. A committee hearing would be the first tangible signal of legislative life and could justify a modest tactical entry into homebuilders, particularly TOL. Until then, this is noise.
Full Analysis
-
WHAT HAPPENED: On December 3, 2025, Senator John Cornyn (R-TX) introduced S. 3332, the 'More Homes on the Market Act,' with 5 bipartisan cosponsors (Bennet, Daines, Schiff, Barrasso, Kelly). The bill was read twice and referred to the Senate Committee on Finance, where it remains. As of April 30, 2026, there has been no committee markup, no hearing, and no further action. This is an early-stage bill with zero legislative velocity over five months. Two related House bills (HR 6900, HR 1340, HR 4856) also remain in committee, confirming no coordinated push.
-
THE MONEY TRAIL: The bill does NOT authorize or appropriate any federal spending. It is a tax code modification that reduces federal revenue by increasing the capital gains exclusion on home sales. Per JCT scoring conventions, this would reduce federal tax revenue by an estimated $3-8 billion annually, depending on housing market conditions and congressional budget window. The mechanism is a TAX BENEFIT to homeowners, not a government spending program. No companies receive direct payments. The revenue impact on affected sectors (homebuilders, mortgage banks) flows through increased transaction volume, not government contracts.
-
STRUCTURAL WINNERS AND LOSERS: If enacted, the bill disproportionately benefits luxury homebuilders like Toll Brothers ($TOL) where home prices routinely exceed the current $500,000 married exclusion. The lock-in effect — existing homeowners staying put to avoid capital gains taxes — directly constrains inventory. Doubling the exclusion most benefits long-term homeowners in high-appreciation markets, which are concentrated in coastal states. Entry-level builders like D.R. Horton ($DHI) and KB Home benefit less directly, as their typical buyer is less likely to face capital gains. Mortgage lenders (, $BAC, $WFC) benefit from any increase in transaction volume through higher origination fees. There are no structural losers from this bill.
-
REAL MARKET DATA ANALYSIS: As of April 30, 2026, homebuilder stocks are in a sharp 7-day drawdown across the board: DHI -7.65%, LEN -5.81%, TOL -6.49%, PHM -7.60%, KBH -6.84%. This selling is concurrent with a broader market move and is NOT related to S. 3332, which has seen no new developments. The 30-day trends remain positive (+14.43% DHI, +4.51% LEN, +6.98% TOL, +6.15% PHM, +3.54% KBH), reflecting prior momentum from the spring homebuying season and falling mortgage rates. Bank stocks BAC ($52.88) and WFC ($81.51) show a contrasting 7-day gain (+0.78% and +1.24%) with strong 30-day trends (+11.96% and +6.13%). None of these price movements reflect S. 3332, which has been entirely dormant since introduction.
-
TIMELINE: The legislative path requires: (a) Senate Finance Committee markup and vote; (b) Senate floor consideration; (c) House passage (either identical or conference); (d) Presidential signature. With zero committee action in five months, the probability of passage in the 119th Congress is sub-20%. Tax extenders or year-end omnibus are the most likely vehicle for any action, and then only if the bill gains committee chair support or is attached to a must-pass package. No hearings currently scheduled.
Intelligence Surface
Cross-referenced against federal contracts, SEC insider filings & congressional trade disclosures
Multiple independent sources confirm this signal’s market thesis
What the bill does
Tax incentive — increases capital gains exclusion on principal residence sales from $250,000/$500,000 to $500,000/$1,000,000 with inflation adjustment
Who must act
Homeowners selling primary residences post-enactment
What happens
Reduces tax burden on home sales, increasing homeowner financial incentive to list properties and transact
Stock impact
D.R. Horton (DHI) builds primarily entry-level and first-time buyer homes. Higher transaction velocity increases demand for new construction as existing-home inventory turns over more quickly. DHI's ~60,000 annual home closings could benefit from a faster market cycle, reducing holding costs and improving working capital turnover
What the bill does
Tax incentive — increases capital gains exclusion on principal residence sales from $250,000/$500,000 to $500,000/$1,000,000 with inflation adjustment
Who must act
Homeowners selling primary residences post-enactment
What happens
Reduces tax burden on home sales, increasing homeowner financial incentive to list properties and transact
Stock impact
Lennar (LEN) sells across price points with focus on move-up buyers who are more likely to have significant capital gains. Higher exclusion could particularly incentivize long-term homeowners in appreciated markets to sell and buy new Lennar homes. Lennar's ~70,000 annual deliveries could see modest volume lift from increased trade-up activity
Connected Signals
Matched on shared policy language across AI analyses, with ticker & timing weight
Affordable Housing Credit Improvement Act of 2025
Affordable Housing Bond Enhancement Act
To direct the Secretary of Housing and Urban Development to establish a demonstration program to develop workforce housing and affordable housing in areas where the workforce is expanding significantly, and for other purposes.
Ensuring Better Interest Treatment and Deductibility Act (EBITDA)
SSI Savings Penalty Elimination Act
Main Street Capital Access Act
Merchant Banking Modernization Act
Improving SBA Engagement on Employee Ownership Act
Related Presidential Actions
Executive orders & memoranda affecting the same sectors or companies
National Homeownership Month, 2026
This proclamation formalizes National Homeownership Month and details several ongoing or proposed policy actions: Fannie Mae and Freddie Mac are directed to purchase $200 billion in mortgage-backed securities to lower borrowing costs; an executive order bans large institutional investors from buying single-family homes; and the Administration calls on Congress to pass the 21st Century ROAD to Housing Act to make these reforms permanent. The action also reaffirms efforts to restrict taxpayer-backed loans to only law-abiding citizens, targeting fraud and illegal immigration as a means to improve housing affordability.
Implementing Schedule Policy/Career in the Excepted Service
This executive order expands the Schedule Policy/Career excepted service category, transferring certain federal positions from competitive service to at-will employment to facilitate removal for poor performance or misconduct. It directs agency heads to petition for reclassification of policy-influencing roles, mandates performance bonus pools for these employees, and amends civil service rules to exempt them from standard adverse action procedures.
Removing Unnecessary and Counterproductive Restrictions on Access to Federal Lands
This executive order rescinds two 1970s-era executive orders (11644 and 11989) that required federal agencies to use vague environmental and social criteria when designating off-road vehicle use on federal lands. It directs the Secretaries of War, Interior, Agriculture, the TVA Board, and other relevant agency heads to initiate rulemakings to remove or revise regulations based on those criteria, aiming to increase access for energy, timber, utility maintenance, and recreation.
Free — no credit card
Get the next market-moving signal before the news does
HillSignal scores every Congressional bill, federal contract, and insider filing for market impact and emails you the high-conviction ones — free, no credit card.
Weekly digest — the congressional activity that actually moved markets that week, in plain English. Free, one email.
Free forever plan · No credit card · Unsubscribe in one click
Want the live terminal too? Create a free account →