Passive Rental Loss carryover question

I am a retired landlord (active by IRS definition) with 2 rentals.

 

I have interest and dividend income and a rental loss.  My itemized deductions (home mortgage interest & property taxes) would reduce my taxable income below zero. 

 

Why does Form 1040 deduct my rental loss from my income first and then apply my itemized deduction?  

 

The rental loss sort of becomes useless (in tax  terms).  Is there a way to carry it forward instead?