The mortgage interest deduction tends to benefit high income earners

See The Myth of the Middle Class Mortgage Deduction: The mortgage interest deduction no longer primarily benefits the middle class by Anthony Randazzo of Reason. Excerpt:

"In 2009, only one-fourth of taxpayers in 2009 claimed the mortgage interest deduction. And this has been a relatively stable historical trend, with between 21 and 26 percent of taxpayers claiming the MID each year since 1991. Of those few who do benefit from the MID, most are households in the top income brackets and younger individuals with large mortgages 
who have not paid off much of their loans. Families where the head of household is between 25 and 35 years-old with incomes over $250,000 have, on average, a $7,711 deduction from mortgage interest, compared to a similar household with earnings between $40,000 and $75,000 a year, and taking an average $571 deduction. Meanwhile, low-income families, seniors, and Americans without mortgages gain virtually nothing from the program.

Many Americans believe the mortgage interest deduction allows them to deduct their entire interest payments from their tax bills—and make home purchasing decisions based on that misunderstanding. Instead, the MID lowers taxable income. Tax bills are lowered, but that's a much smaller benefit.

When considering the actual tax savings of the mortgage interest deduction, the benefits to the middle class become even more meager. The average tax savings for households with income between $40,000 and $75,000 is just $152 a year. That's $12.66 a month. Compare that to the highest earners, those making $200,000 or more, who see an average of $1,862 a year off their tax bills because of the MID benefit.

One reason often cited for preserving the mortgage interest deduction is the belief that it helps increase 
the homeownership rate. But as it turns out, the MID is an inefficient tool for increasing homeownership. Since 1994, the homeownership level has gone from 64.2 percent up to 69.2 percent 
in 2004 and then down to 66.4 percent today. The recession and collapse of the housing market is largely responsible
 for the decrease in homeownership. If the mortgage interest deduction were driving people to buy homes we would expect to see some correlation between homeownership rates and the use of the deduction, but we don’t. The total mortgage interest deduction subsidy has grown from roughly $50 billion to $80 billion since 1994 with little impact on homeownership levels.

This is because those households that rent but would prefer to own a home—if they had just a bit more financial flexibility—are typically low-income families. And if they bought a home they would be much less likely to itemize their deductions and claim the MID because they are low-income in the first place. For median income families that do itemize, a $12.66 per month tax savings is not likely to be the difference between affording a mortgage payment and renting. As a result, rather than increasing the homeownership rate, the primary impact of the MID is to increase the amount spent on housing by consumers who would likely choose to own a home anyway, subsidizing spending on housing rather than homeownership."