Even though people receive a tax deduction for interest on mortgage payments, they pay for all their other expenses with after-tax dollars, even after they pay off their mortgage, then their property taxes.
It does mean that we're going to be paying more for getting a mortgage loan if we want to buy a home, which is already very unaffordable, you know, given the high rates and the high house prices.
America's tax code is riddled with distortions that favour the rich, from the loopholes benefiting private equity to the mortgage-interest deduction (an enormous subsidy for those who buy big houses).