America’s $100 billion tax break helps the rich buy bigger homes
But instead of helping poorer people become homeowners, the tax break helps rich people buy bigger houses, economists at R Street Institute say. “The study estimates that tax preferences, particularly the mortgage-interest deduction, have helped drive up the size of houses by as much as 18% in the nation’s most affluent areas while not broadly encouraging people to buy homes,” the Wall Street Journal notes. The average house sold today has more than 2,500 square feet of space. That’s 750 square feet larger than the average size of a house bought in 1980 and 400 square feet larger than the average home sold in 1990, according to the researchers. Larger homes are more expensive homes, so by inflating the size of houses on the market, the mortgage interest deduction is likely pushing up the price of homeownership for everyone. That’s good for real estate agents, but not for middle- and low-income families.