TurboTax generally only asks follow-up questions if your Outstanding Mortgage Principal in box 2 of Form 1098 exceeds $750,000 in order to try to maximize the deduction. If your amounts do not add up to that, your entire mortgage interest is deductible anyway so it does not need any clarifying information. Otherwise, your interest deduction may be limited.
If the Outstanding Mortgage Principal on your two 1098s does not add up to $750,000, report them just as they are. Mark them both as your primary home and that the first one was paid off.
If it exceeds that amount, you can enter $0 as @JillS56 outlined above for the sold home. It sounds like this brings the amount below $750,000 for Outstanding Mortgage Principal which is why you are not being asked any follow-up questions. This is also fine.
The finalized worksheet to properly calculate the Mortgage Interest deduction should be released on February 17, 2022. If your Outstanding Mortgage Principals exceed $750,000 you can wait until then and report the Forms exactly as they appear. The system will then ask you follow-up questions about each loan after you enter both. In the Tell us a little more about your loan you will enter the final principal balance and the payoff date of the home you sold in March. For the mortgage on the new home, you will enter the loan balance as of January 1, 2022, which should be slightly lower than the Outstanding Mortgage Principal reported on Form 1098 since you will have made a year's worth of mortgage payments. TurboTax will then correctly calculate the mortgage interest deduction based on the average balance of both loans.
