NerdWallet: Three ways we could convince homeowners to sell their homes—by paying them

by | Jul 31, 2023 | Stock Market

This article is reprinted by permission from NerdWallet.  A frustrating thing about today’s housing market is the paltry number of homes for sale. Would-be buyers outnumber sellers, even as high mortgage rates strain affordability. So here’s an idea: What if the government paid people to sell their houses?

After all, the government paid people to buy houses after the 2008 financial crisis, when there weren’t enough buyers. Now, it could pay people to sell houses when there aren’t enough sellers. We’re not talking about something as direct as the feds cutting checks. Payments would be handled through the tax code. The notion has drawn support in the U.S. House, where a bill to double the capital gains exclusion on primary residences has 15 co-sponsors from both parties. That’s not the only way Congress could tweak the tax code to pay home sellers: The National Association of Realtors commissioned a study that came up with two more ideas, although neither has been drafted into legislation. Read: So you want to buy a house? Expect to pay more than 30% of your income.Why inventory is low Not enough homes are for sale in large part because homeowners don’t want to give up their low mortgage rates. “The primary reason why inventory is low is because about 80% of homeowners have an interest rate that’s lower than 5%,” Sherry Chen, a Realtor with Kappel Realty Group in San Diego said in an email. “Even if a homeowner thinks their house is too small, too old, etc., they cannot afford to sell and purchase a bigger/better property at a rate that may be double than what their current rate is.” Chen expects more homes to come to market “once rates come do …

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