Where did I say anything about renting?
A lower priced house, perhaps. A shorter mortgage that could be paid off in no time.
You mentioned deductions. You seriously think someone should be proud of paying $40k in interest so they can get 30c on the dollar on their income taxes?!?
I agree renting or some other means of living needs to be factored.
But it’s still the matter of your hypothetical $200k/yr person spending $40k on interest (not to mention the principal and taxes).
As I stated, I’m against interest (and taxes), not necessarily the $1M home (quality of modern construction aside), and especially not against those who have high paying jobs.
That's exactly my point, you didn't account for renting instead of buying which is the default option. Lots of times if you want a particular area with the good schools then you're talking a high dollar amount for a good sized property. Sure you live in a hovel instead of what you're used to but people also like to entertain and have people over and they'd be wondering why you're making 200k and living in a tiny place.
Interest is just another expense, but if you compare renting with owning, while you pay interest when you own, at least you can deduct it. You can't really deduct rent. Also people tend to refinance after a few years anyway, when they make more money, they can refinance into a 15 year mortgage. That probably won't really happen in the future if the rates stay high but if rates drop that's certainly possible. People tend to refinance after 3 years on average just like average home ownership is 7-10 years, no one really pays interest on the same mortgage for 30 years.
While you see lots of shoddy modern construction, those older 100 year homes around me are worse, typically utility costs are like 2-4x times higher because they didn't do much insulation back then because energy was cheap.
That 40k in interest works out to about the 24% tax rate for a couple filing jointly so you save $9600 in taxes so it really works out to $30,400 or about $2500 a month. You can easily spend more than that a month just on rent for an equivalent type home. And your interest payments go down over time whereas the rent only increases in time. That's why there are rent/own calculators, typical payback is somewhere between 3-7 years depending on various factors and that includes interest payments.
Lower priced home or small home are basically the choices of the buyer. Who are you to interfere with what people want? They normally watch too much TV and want what they see on TV. Real estate brokers and mortgage brokers don't interfere with people's financial lives. Real Estate brokers are not financial advisors, they just stick to selling real estate. You can rant and rave all you like, but it's really the fault/desires of the buyer that controls, real estate brokers and mortgage brokers have nothing to do with it. There is absolutely ZERO training on financial matters for real estate brokers so they are ABSOLUTELY not qualified to tell someone whether maybe they should be funding their retirement account or saving for their kids college fund. They are absolute not qualified to sell insurance or any other financial products or even required to have any knowledge of it. You're basically told to refer all that out, contact a home inspector, lawyer, accountant, tax professional, financial consultant, etc. Only give advice where you're qualified and as a licensed broker, you're only licensed to sell homes. Should Uber drivers check to see if people should really be going to a bar? Their job is to drive you to a place. That's it. Real estate brokers jobs are to sell you a home.
And why are you even expecting a real estate broker or mortgage broker to see if it's really appropriate for them in the whole scheme of things? Name one sales job where they actually do that aside from financial consultants. If you want an iphone, the phone store will sell you one, basically you can buy whatever you like without anyone digging into your financial status and seeing if it's really appropriate for you. You requirements/expectations for that really doesn't make any sense.