1) Lots of studies have been done on educational performance of children in homeowning families and there is a positive correlation and causation.
2) Homeownership rates have not changed in almost 40 years despite fluctuations in % people itemizing (and profound changes in the tax code).
As someone who doesn’t want riots, I think phasing out, or putting caps on deductability so that the housing market can slowly reflect those changes makes sense.
As an observer of the framing of the political discussion, I think it was brilliant to move the Overton window: offer something outrageous first (abolish deduction) so that your next offer seems sane by comparison (cap deduction)
Canada has similar homeownership rates with no interest deduction, and mortgages that are all basically 5 year ARMs — you have to reset the rate every 5 years over the 15-25yr loan. And none of their banks failed. Just an observation.
