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A look at how tax breaks can skew the housing market and housing prices.

Demand for property now exists in several forms beyond simply having a place to keep your stuff. There are those who speculate in property, those who accumulate property for rentals and others. The wealth-multiplying effect of mortgage interest tax breaks allows individuals with more property to hide more and more wealth while making more and more money - in turn allowing them to increase their consumption of property. Sit on this trend long enough and what happens? Housing prices begin to rise in accordance with demand, pricing lower income individuals out of the market for equity, while simultaneously increasing the equity held by the wealthy.

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