Home builders have 26.8% of all the homes currently listed for sale on the U.S. housing market.
The long-term average is only 15%.
While it would be great for builders to build more, we really need more existing owners to sell.
Particularly investors.
The long-term average is only 15%.
While it would be great for builders to build more, we really need more existing owners to sell.
Particularly investors.
1) Home builder inventory is actually near a record high in 2025, while existing inventory is not even close to a record.
In fact, existing home inventory is not yet back to its 2019 levels.
In fact, existing home inventory is not yet back to its 2019 levels.
2) Any push to get more homes listed for sale, and to sustainably increase inventory needs to focus on investors.
For instance, investors own over 15 million single-family homes in the U.S. according to the Census Bureau, while there are only 1 million homes listed for sale.
If only 10% of investors sold their houses, inventory would theoretically double.
For instance, investors own over 15 million single-family homes in the U.S. according to the Census Bureau, while there are only 1 million homes listed for sale.
If only 10% of investors sold their houses, inventory would theoretically double.
3) There's 99 million single-family homes in the U.S.
15 million are owned by investors (some estimates show more, but I'm using the Census Bureau for this analysis).
That means 15.4% of the single-family stock is owned by investors, primarily mom-and-pop owners.
15 million are owned by investors (some estimates show more, but I'm using the Census Bureau for this analysis).
That means 15.4% of the single-family stock is owned by investors, primarily mom-and-pop owners.
4) Now...how to go about getting more investors to sell?
It's pretty simple if the government has the wherewithal to do it.
-Increase the depreciation timeline for single-family structures from 27 years to 40 years.
-Install a transfer tax for 1031 exchanges on single-family structures.
-Create a temporary waiver on long-term capital gains tax, so long as a home is sold to a primary occupant.
It's pretty simple if the government has the wherewithal to do it.
-Increase the depreciation timeline for single-family structures from 27 years to 40 years.
-Install a transfer tax for 1031 exchanges on single-family structures.
-Create a temporary waiver on long-term capital gains tax, so long as a home is sold to a primary occupant.
5) The whole idea here is to find a way to increase the carrying cost of the houses for investors (reducing depreciation expense, which increases tax liability) while creating an off-ramp to sell (lower capital gains tax on sale).
Employing these practices would free-up much needed housing inventory in a wide array of markets and neighborhoods across the U.S.
Employing these practices would free-up much needed housing inventory in a wide array of markets and neighborhoods across the U.S.
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