Mortgage interest tax deduction: Does it make sense?

In just a few weeks, your opportunity to take advantage of the most recent variation on the homebuyer's credit will expire. By most accounts, this version of the credit, which cost taxpayers a whopping $1 billion per month, was a bust, doing little to actually spur the housing market. While a handful of taxpayers and legislators made noise about another extension, most are inclined to simply let it fade away ... until the next big idea comes along.

Over the years, Congress has created a number tax incentives in the name of increasing home ownership. These incentives have largely been popular with taxpayers even though most taxpayers may not actually see a benefit. The homebuyer's credit is just one example -- only 200,000 taxpayers (out of nearly 154 million taxpayers) reported that the credit actually encouraged them to buy a new home.