[gathersnomoss]

"Those most impacted will be yuppies attempting to move out of apartments, where they held zero equity, into upscale homes."

Wrongo! What if you buy a second home with 20% down that costs $500M? You will se a downturn, my friend.

[the_Watchman]

"Wrongo! What if you buy a second home with 20% down that costs $500M? You will se a downturn, my friend."

There aren't that many real estate markets in the country where people have to purchase a $500K home. In Phoenix, you can still get into a large new home for under $350K. If I'm putting 10% down, then the marginal loss in deduction isn't really a factor to me.

Perhaps they are thinking to cap rising real estate markets around $300K to keep prices within reach?