They still bought a house, and their decision on the house selection was independent of mortgage vs. no mortgage. However I would like to make a point I live in a low cost housing area (compared to NY, Mass, CA, etc.). The dynamics of the market here in North Carolina may be different in high cost areas like San Jose. I really don't know because I have no experience with it.
http://www.latimes.com/business/la-fi-mortgage-tax-deduction-20170828-htmlstory.html For decades, the home mortgage interest deduction has been one of the most sacred of cows in the U.S. tax code. It is particularly revered in Los Angeles and other areas with high real estate prices, where the annual tax savings can be the difference between being able to afford a house or continuing to rent. Now, Republicans crafting legislation to overhaul the federal tax system and cut rates are considering placing new limits on the home mortgage interest deduction. And thousands of Californians could feel the pain. The move comes as GOP lawmakers and Trump administration officials already have proposed killing another break — the deductibility of state and local taxes — that benefits California residents more than those in any other state. ... Although California accounts for about 12% of all tax filers in the country, state residents would make up more than a third of those who would have higher taxes if the cap on mortgage interest deductions were reduced to $500,000. Such a change would also hit future home buyers, particularly in Southern California, said Geoff McIntosh, president of the California Assn. of Realtors. “If Congress were to move forward with a cap on the mortgage interest deduction for loan amounts up to $500,000, a quarter of California’s home sales would be impacted, and those home buyers would end up paying more in taxes,” McIntosh said. “And for those in Southern California, nearly one-third would be affected.” The effects of limiting the mortgage interest deduction would be lessened if the Trump administration and House Republicans also move ahead with plans to roughly double the standard deduction, to $24,000 for married couples filing jointly. The larger standard deduction would mean fewer people would itemize their deductions.