The housing market has been stuck in a prolonged downturn, and seemingly every politician and economist has proposed ways to revive home sales and make homeownership more affordable.
One of the most well-known resolutions proposed is cutting the capital gains tax. Other widely discussed ideas include cutting property taxes, expanding access to credit for prospective buyers, limiting the number of homes investors can purchase and introducing longer-term mortgages. One proposal that has drawn particular attention would extend the traditional 30-year mortgage to 50 years to lower monthly payments.
In the U.S., new home sales are down. In Florida, the market has shown signs of fluctuating from month to month, but digital real estate brokerage firm Redfin reported that over the summer, total home sales were down by almost 9% compared to 2025.
THE PROBLEMS
Inflation hangover from COVID. The war in Iran has driven up costs, which has kept interest rates higher, with the average 30-Year Fixed rate around 6.73%.
PROPOSED SOLUTIONS
To get the housing market moving again, some ideas have been floated around.
The Trump administration threw up a trial balloon of going from a 30-yr mortgage to a 50-yr mortgage. Some analysts say that could lower monthly payments but would drive up interest payments and take longer to build equity.
Another idea was to allow people to take money out of their 401 (k) without penalty when purchasing a home. The Trump Administration opposed it.
One of the most popular ideas to get the housing market back on track is to raise the capital gains exemption or eliminate it.
“In my opinion, this would energize the real estate community,” said Florida Daily Financial analyst Steve Beaman.
Beaman explained how this tax works
Under the current tax code, there is a $250,000 exemption if you are single. If you are married, that number rises to $500,000.
So, if a family bought a home around 10 years ago for $200,000 and sold it today for $800,000, their profit would be $600,000. If you’re married and filing jointly, $500,000 of that gain might not be subject to the capital gains tax because of the exclusion — but $100,000 of the gain could be subject to long-term capital gains tax.
But real experts say the real problem is the shortage of housing inventory, and increasing that supply would change everything.
