General Discussion
In reply to the discussion: One of the reasons there is talk about getting rid of the mortgage interest deduction is [View all]cthulu2016
(10,960 posts)eliminating the deduction decreases the value of all property, including property that has no mortgage.
The deduction represents future value that is intrinsic to all property.
And since interest rates rise and fall, the current low-rates do not negate that intrinsic value.
If you buy a house today at 4% you will still be likelier to be able to sell it down the road even if rates are 20% (like in 1980) because the intrinsic federal subsidy of the value expands along with the size of the interest component of a loan. So the market value of that property will increase more, in an inflationary period, than a comparably priced diamond or other physical investment.
Personally, I think if someone wants to cut taxes to help the economy I would return to all interest being deductible. I am not comfortable with the special status of property, but anything that can be done to reduce effective borrowing costs would be non-point as stimulus.