Except it just makes it more difficult for people to actually own their home. Instead, it raises home prices by forcing people who would otherwise be happy rent

Except it just makes it more difficult for people to actually own their home. Instead, it raises home prices by forcing people who would otherwise be happy renting in modest apartments or {du,quad}plexes into buying detached single-family homes in order to reap the mortgage deduction. And it's not like most of these mortgage holders are taking the loan for convenience's sake, to avoid selling off some art they're rather attached to, or their other home in Monaco. These are ordinary people who decide, based on this distortionary government policy, to take out 30 year loans that they really will need 30 years to pay off, if they can at all.