The “More Homes on the Market Act” would double the capital gains exclusion for sales of principal residences from $250,000 to $500,000 for single filers and from $500,000 to $1 million for married couples - and index these amounts for future inflation. The bill is unlikely to move in 2022 however it's a great first step to build on when a new Congress convenes.
Under the current law maximum capital gains exclusion amounts are no longer covering the gains that many longer-term owners have when they sell their homes and downsize. With huge increases in home values over the last 3 years this has created a disincentive for many to want to sell their homes and move into smaller ones.
Increasing the exclusion will make it easier for homeowners to earn more from their investment and incentivize them to sell and increase the amount of homes on the market.