No, you cannot omit the second Form 1098. If you want to take the mortgage interest deduction as an itemized deduction, you must include all the mortgage interest you paid.
You can manually calculate the Outstanding Mortgage Balance to report for your second 1098 on the new home using the interest rate method by dividing the interest paid reported in box 1 by the lowest interest rate you paid on this home during 2021. You can use this calculated amount as the Box 2 Outstanding Mortgage Balance rather than what is reported on Form 1098.
If the system asks for the balance of your loan on January 1, 2022, you will want to report the same number you calculated since the system will take the average of these two numbers as your Outstanding Mortgage Balance.
TurboTax is also working on finalizing the worksheet that would calculate the balance using the average mortgage balance. Once corrected, it should give an answer similar to the interest rate method, because the months you did not have the mortgage would count as $0. You can sign up for notifications when it will be ready here.
