The More Homes on the Market Act:
A Game-Changer for Senior Homeowners
Author: Todd Galde | Sr. Loan Officer
December 17, 2025
Breaking Down the Barrier to Your Next Chapter
For millions of senior homeowners across America, the dream of downsizing or relocating has been overshadowed by an unexpected obstacle: success. After decades of homeownership, many have watched their property values soar beyond their wildest expectations. While this represents a lifetime of smart investing and favorable market conditions, it has created an ironic problem. The very wealth accumulated in their homes has become a financial trap, thanks to capital gains tax implications that can cost tens of thousands of dollars when selling.
The More Homes on the Market Act, a bipartisan bill introduced by Representatives Jimmy Panetta and Mike Kelly, promises to change this dynamic entirely. By doubling the capital gains exclusion from $500,000 to $1 million for married couples filing jointly (and from $250,000 to $500,000 for single filers), this legislation could finally give senior homeowners the freedom to make housing decisions based on their needs rather than tax consequences.
Under existing tax law, homeowners can exclude up to $500,000 in capital gains when selling their primary residence, provided they've lived in the home for at least two of the past five years and meet other requirements. For many years, this exclusion was more than adequate for the average American homeowner. However, the explosive growth in home values over the past two decades, particularly in coastal cities and desirable retirement destinations, has rendered this 1997-era limit increasingly obsolete.
Understanding the Current Problem
Consider a couple who purchased their home in a major metropolitan area thirty years ago for $200,000. Today, that same home might easily be worth $1.5 million or more. While they can exclude the first $500,000 in gains, they would owe capital gains taxes on the remaining $800,000 in appreciation. At current rates, this could mean a tax bill exceeding $150,000, a staggering sum that effectively penalizes them for staying in their home and being part of a thriving community.
This tax burden has created what economists call "lock-in effect," where seniors remain in homes that no longer suit their needs simply because moving would trigger an enormous tax liability. Empty nesters continue living in large family homes when a smaller condo would better serve their lifestyle. Seniors who want to move closer to family or to more age-appropriate housing find themselves financially discouraged from doing so. Retirees hoping to tap their home equity to fund their retirement are stuck, unable to make the move without sacrificing a significant portion of their life savings to taxes.
The proposed legislation offers transformative benefits for senior homeowners, addressing both financial and lifestyle considerations that have kept many feeling trapped in unsuitable living situations.
The Benefits of the More Homes on the Market Act
Financial Freedom and Security
The most immediate benefit is the substantial tax savings. For couples with over $500,000 in home equity gains, the increased exclusion could save them $120,000 or more in federal capital gains taxes. This isn't just money saved; it's money that can be redirected toward purchasing appropriate housing, covering healthcare costs, or simply enhancing retirement security. For seniors on fixed incomes, this represents a meaningful difference in their financial wellbeing during their retirement years.
Lifestyle Flexibility
Beyond the dollars and cents, the More Homes on the Market Act restores something equally valuable: choice. Seniors could finally consider downsizing to more manageable properties without the fear of a tax penalty. They could relocate to be near children and grandchildren. They could move to single-level homes that better accommodate aging in place. They could transition to retirement communities or active adult developments designed for their life stage. The ability to make these decisions based on personal preference rather than tax consequences represents genuine freedom.
Access to Equity
Many seniors have the bulk of their wealth tied up in their homes. The current tax structure makes it prohibitively expensive to access this wealth through a sale. With the increased exclusion, seniors could sell their homes and use the proceeds to fund their retirement without being penalized for their success as homeowners. This is particularly important given increasing longevity and healthcare costs that weren't fully anticipated when many current retirees first purchased their homes.
Inflation Protection
Importantly, the More Homes on the Market Act includes provisions to index the exclusion amount to inflation going forward. This means future generations of homeowners won't face the same problem that current seniors are experiencing. The exclusion will automatically adjust with housing prices, ensuring that it remains relevant and effective rather than becoming obsolete over time.
Broader Market Implications
While this legislation is particularly beneficial for seniors, it also addresses larger housing market dynamics that affect everyone. When seniors are unable to move due to tax implications, they occupy housing inventory that might be better suited for growing families. The current exclusion limit contributes to housing shortages in high-cost areas by discouraging turnover among long-term homeowners.
By enabling more seniors to sell and move on to appropriate housing, the More Homes on the Market Act could increase the supply of family-sized homes in desirable neighborhoods, potentially easing price pressures for younger buyers. This creates a more efficient housing market where properties are occupied by those who need them most, rather than by homeowners who would prefer to move but can't afford the tax consequences.
Looking Forward
The More Homes on the Market Act has earned bipartisan support precisely because it addresses a real problem affecting Americans across the political spectrum. Homeownership is a cornerstone of the American Dream, and this legislation ensures that achieving that dream doesn't become a burden in retirement.
For senior homeowners who have been postponing decisions about their housing future due to tax concerns, this proposed legislation offers hope. While the bill is still working its way through Congress, its introduction represents growing recognition that our tax code should support, not hinder, Americans' ability to make the best decisions for their circumstances.
The message is clear: after a lifetime of building equity in your home, you shouldn't be penalized for that success when the time comes to move to your next chapter. The More Homes on the Market Act aims to ensure that senior homeowners can make housing decisions based on what's best for their lives, their families, and their futures, rather than being held hostage by outdated tax policy. For millions of Americans, that freedom to choose could make all the difference in enjoying a secure, comfortable, and fulfilling retirement.