Via Daily Kos: The Problem with the Mortgage Deduction
"In the end, the sky high homeownership rates the US has seen has proven to be a very bad thing. A lot of places with tanking economies have it so bad because people can't move somewhere else, all their money is tied up in their homes. They can't afford to buy a new home elsewhere, and they can't sell their current homes for any appreciable amount of money.
Homeownership offloads the vast majority of the economy's risk onto the homeowners, and it's highly correlated with their job prospects. You have the most trouble selling your home just when you really, really need to do so. People with only 100k net worth should not have 80k of it tied up in their homes, end of story. It would be financial malpractice to advise anything similar for an asset that is not a home, e.g. if a financial adviser told you to put 80% of your net worth in the stock of your employer... It's lunacy.
Homeownership as a goal we all need to strive for is a sizeable fraction (perhaps 60%) of the problematic thinking that keeps bringing us back to the brink like this."
- iwadasn