Owners across the country have seen the price of their homes sky-rocket over the past decade, a trend that has only escalated in the years since 2020. That has made it harder for young people to buy a home and the problem is getting worse due to the failure of Congress to update a tax law, making older people reluctant to sell their homes and restricting the supply of new homes hitting the market.
To understand the problem, flash back to 1997. That’s when Congress established a capital gains tax exemption of up to $500,000 for couples. The rule means couples who sell a home for more than what they paid for it pay no tax on any gains up to that amount, provided they have lived in the home for at least two of the past five years.
