[FreedomCalls]

Would you be able to buy a larger home if interest rates fell to the tax free rate (a decline of say 25%)?

No because I would not be able to afford a house 25% more expensive (actually more because I don't get to deduct mortgage interest under the NRST).

BTW a decline of 25% off of current 6% mortgage rates takes it only to 4.5%. Some ARMs are in the 3% range already.

[Principled]

No because I would not be able to afford a house 25% more expensive

Prices don't rise. Homes will be priced the same. The NRST replaces existing taxes - doesn't add to them.

FAQ

(actually more because I don't get to deduct mortgage interest under the NRST).

Egads. The mortgage interest deduction only allows you to pay mortgage interest with pretax dollars. OTOH the NRST allows you to pay mortgage interest AND EVERYTHING ELSE with pretax dollars too!

So the nrst lowers interest rates, keeps prices stable, and allows you to pay mortgage interest, AND EVERYTHING ELSE with pretax dollars.