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"Sold" sign in front of a home under construction at the Waterways subdivision in Gulf Shores, Alabama. Real estate experts are weighing in on President Trump's proposal to eliminate capital gains tax on home sales and its potential impact on the housing market. The National Association of Realtors has been advocating for this change, citing that 15% of current homeowners would be affected by the tax if they sell their homes today.

    Lawrence Yun, NAR's chief economist, notes that accountants advise clients not to sell due to the tax burden. If the exemption amount is lifted, Yun expects a significant number of listings from those who were previously hesitant to sell. The capital gains tax currently applies to profits above $250,000 for individuals and $500,000 for couples.

    Most homeowners affected by the tax are on the higher end of the market, with median home prices exceeding $435,300 in June. However, housing analyst Stephen Kim suggests that a return of confidence is more crucial for the housing market than eliminating capital gains tax. He attributes current instability to actions taken by the Trump administration, which may deter potential buyers.

    Redfin's Chief Economist Daryl Fairweather proposes that cutting the tax could actually keep homeowners in their homes longer as some decide to sell just before reaching the tax threshold. Instead of eliminating capital gains tax, Fairweather suggests reducing taxes on home improvements, such as adding an accessory dwelling unit (ADU), which increases a home's value.