I’ve never understood the “benefit” of the interest write-off. In my particular case it doesn’t seem to pencil out. I still think I’m slightly better off NOT itemizing.

But I’ve been hearing the argument over the past several years regarding CA real estate. And I’ve wondered how it could possibly be smart to buy an overpriced house and end up underwater in the long run all for the sake of saving a few thousand in taxes in the short run.

In general I would be in favor of the government NOT subsidizing home ownership at all, especially not mortgages or mortgage rates. It seems to me like efforts to make homes “more affordable” only allow prices to get bid up more, which is actually not more affordable. Seems like “affordable” and “easy credit” are often confused.

Does that mean if I buy this year I’m not going to claim the $8K credit? No. But the existence of that credit make me suspicious that I can save more than that if I wait another year. The $8K credit seems designed to try to instigate a suckers rally. Besides, if I wait to 2010 will I get a $15K credit? How about $50K?