The mortgage interest deduction is a ridiculous, market-distorting handout to higher income people. And I say this as someone who bought an absurdly expensive bay area house last year.

Tons of people in cheaper areas pay so little in interest and property taxes that they don't even itemize their deductions.

I don't know how it ever seemed like a good idea. If everyone can afford x% more housing cost, what happens? Housing costs get bid up by x%.