Episode summary
Should we cut the capital gains tax on home sales?
HousingWire Daily
· · 13 min · Hosts: Sarah Wheeler, Tracey Velt · Guests: Logan Mohtashami
Summary
Logan Mohtashami argues that cutting or expanding the capital gains exemption on home sales could boost transactions, but it may also intensify competition for housing. He says the usual pro argument is that baby boomers are sitting on large amounts of equity and would be more willing to sell if they could keep more of the gain. But he is skeptical that this helps affordability, because the same sellers would often become buyers again with more cash in hand.
His main concern is that a bigger exemption would give a very large, wealthier cohort more purchasing power, potentially bidding against younger households that still need mortgages. He frames this as a secondary inflationary effect that people overlook when they focus only on encouraging sales. He points to the COVID-era migration from California to places like Boise, Texas, and Tennessee as an example of how cash buyers can distort local markets.
Mohtashami also ties the housing outlook to midterm politics and the broader White House playbook: lower mortgage rates, lower energy prices, and a weaker dollar. He says those forces would support housing demand, but the conflict, Treasury yields, and mortgage spreads remain the key variables to watch through the rest of the year.
Key takeaways
- Mohtashami says a bigger capital gains exemption could encourage baby boomers to sell, but it may also help them bid more aggressively on their next home.
- He argues the biggest overlooked risk is that a wealthier seller cohort would compete directly with younger buyers who need financing.
- Mohtashami says lower mortgage rates, lower energy prices, and a weaker dollar are central to the White House's economic strategy.
- He says mortgage rates around 6% to 6.75% would be workable, while rates above that become harder on demand.
- He expects midterm politics to keep capital gains changes in the conversation, but says the conflict and mortgage spreads will matter more for housing.
Notable quotes
“the capital gains exemption, right? You know, people talk about, well, nobody should pay any capital gains on on housing”
“these baby boomers are sitting on a lot of equity and they don't want to sell because they don't want to pay capital gains”
“This massive generation which has a massive generation wealth will just have more wealth”
“this isn't maybe not be a 100% positive thing. I realize I get it. Baby boomers are doing great”
“Lower mortgage rates, people buy homes. When people buy homes, what do I talk about? People buy homes, they have sex, they have kids”
How the episode opens
Hello everyone. Of course, we are missing someone right now. Sarah Wheeler has technical issues and begrudgingly trust me, it was very hard for her to say, uh can you do the podcast yourself?
So, Logan Mohtashami, lead analyst for HousingWire today, and I'm going to talk about a few subjects uh without Sarah here, but of course, uh our last podcast and last article we wrote, we talked about how to kind of track foreclosure data properly out there, and also I hope the article itself showcased a kind of a tracking model. And for all of you that are subscribers to HousingWire Intelligence, I think you all can do this for your own areas, too. Again, my stuff is always to talk about the national data, but I'm here to try to help everyone out on your local data.
But today's subject is actually going to be something that's nash national in in nature because we are getting closer to the midterms. And things have turned out a lot different this year in 2026. Of course, when we went into this year, a lot of people were thinking two to three rate cuts, and AI was going to take all the jobs, and private credit was bad, and and the 10-year yield got below 4%.
Rates were at 6%, but of course, you know, inflation picked up, then the conflict picked up. But as we get closer and closer to the midterms, you're probably going to hear more and more ideas come out. The one that I want to discuss today is the capital gains exemption, right?
You know, people talk about, well, nobody should pay any capital gains on on housing, or maybe the baby boomers should have go from 500,000 to 1 million. There's different forms of this uh capital gains uh exemption.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- capital gains tax
- home sales
- midterm elections
- housing policy proposals
- housing market
Watch the episode
Watch “Should we cut the capital gains tax on home sales?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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