$70,000 is much more than enough to buy a $250,000 home as long as Obama doesn't shazbot! with the mortgage interest deduction.
Are you stupid or just Fake Sugar Dick (WARNING, NOT THE REAL SUGAR DICK!)? Let's assume that this family only consists of 2 people needing qualifying deductions of more than $11,400, this is the standard deduction for married couples filing jointly.
Now we'll assume this couple put 10 percent down ($25,000) and doesn't have much else in the way of debt. Let's see how much that deduction is really worth. A 30-year note at 5.5 percent would be $1,277.53 for P and I, with I running about $1,030 per month or $12,360 per year. Let's say they pay another $100 per month in PMI for an additional $1,200 and have another $3,000 in state income taxes and another $3,000 in property taxes. So by owning a house they get a new deduction of $19,560. Or they've essentially lowered their taxable income by about $8,000 so they've saved a grand total of about 1 mortgage payments. Because it's a deduction, you're only "saving" those deductions at whatever your tax rate is.
This couple basically got a discount of $1,200 by spending that $19,560 since their gross income was $70k they would have been in the 15 percent bracket with the standard deduction already, meaning they only "saved" 15 percent of the extra $8,000.
And if that couple plans to live in the house for any length of time, it's highly likely that their deductions won't be enough to outpace the standard deduction since that generally rises with inflation and the amount of interest they are paying is being reduced with each payment.
The mortgage interest deduction is one of the worst ideas ever dreamed up. It doesn't promote home ownership, it promotes people taking on more debt. You want to really stabilize housing prices? Allow people to save money tax free for a down payment of 20 to 25 percent. That's a much more fiscally conservative way to treat housing and if those hefty down payments were required, it would almost eliminate future real estate bubbles.