'Not clear' ending capital gains tax on homes would help housing market, says Redfin's Fairweather

Housing Market Trends - Redfin's chief economist suggests that eliminating capital gains taxes on primary residences might not necessarily stimulate the housing market; it could even disincentivize selling [2][3][4] - The housing market is rebalancing, shifting towards a buyer's market with increased inventory [5] - According to Zillow, 26.6% of listings saw price cuts in June, the highest since 2018, indicating a market correction [5] - Increased negotiating power for buyers, especially in areas with substantial construction during the pandemic like Florida and Texas [5] - Rental market stability provides an alternative for potential homebuyers [6] Pricing and Transactions - Increased transaction activity is anticipated later in the year as sellers adjust to meet buyer expectations [7][8] - Seller realization of market realities, influenced by comparable sales data, is crucial for aligning buyer and seller expectations [9][10] Tax Policy Implications - Redfin suggests reducing taxes on home improvements, such as ADUs, to incentivize housing unit creation [4]