AND ALEJANDRO LAZO, WASHINGTON AND LOS ANGELES — Moving to shore up a still shaky economic recovery, the Senate unanimously agreed Wednesday to extend jobless benefits, continue the popular tax credit for first-time home buyers and offer a new tax break to homeowners who want to move up.
The existing tax credit for first-time buyers, set to expire at the end of the month, has helped boost home sales across the country. Under the Senate bill, both first-timers and existing homeowners would be able to take advantage of the expanded program through the end of April.
The measure would continue giving an $8,000 tax credit to first-time buyers and would provide a $6,500 tax break to qualified homeowners looking to move up to middle-market homes that cost no more than $800,000.
In addition, the legislation would raise the qualifying income levels to $125,000 for individual income tax filers and to $225,000 for joint filers.
Finally, the bill, which the House is expected to pass as early as today, would extend unemployment benefits 14 more weeks nationwide and 20 more weeks in California and other hard-hit states. That would give the long-term unemployed nearly two years' worth of benefits.
The enhanced home-buyer tax credit could particularly help Southern California, where sales of entry-level houses have been brisk but where the move-up market has continued to suffer.
"Would this create another incentive for buyers? Sure," said Andrew LePage, an analyst with San Diego research firm MDA DataQuick. "But a lot is going to depend on how many cheap foreclosures come on the market and what interest rates do."
Price, the availability of low-cost financing and the direction of the economy are likely to play bigger roles in whether homeowners can move up to houses costing more than $300,000, he said. And many would-be sellers in that middle market are sitting out, waiting for their home values to rise again.
Despite criticism that the expanded tax credit wouldn't be very effective, the legislation has strong support in Washington, and President Obama is expected to sign it as soon as it crosses his desk.
The current home-buyer tax credit, along with lower mortgage rates and cheaper home prices, has led to a rush by first-time buyers to close purchases before it expires.
"I have never seen an October, or an early November, with this level of activity," said David Emerson, a real estate agent in Lakewood.
