The real issue is why housing is so unafforable.  That is what needs to be looked at.  Having a large mortgage deduction distorts the real issue.  It also gives people a disincentive to buy more house than they can afford or even purchase a house before their ready.  As someone who got hosed by the tax code when I was being responsible and renting, it really annoys me that the tax code is so skewed toward home ownership.