The Senate's agreement to extend and expand the tax credit for homebuyers comes as a relief to many in the real estate industry.
The plan, which still must be voted on in both houses of Congress, would extend a credit for new homebuyers of up to $8,000 beyond November. It also would provide a $6,500 credit for homebuyers who have owned their current home for at least five years.
Both provisions would require buyers to have a contract by April 30 and close on the home within 60 days.
The move was pushed hard by the real estate industry. Its intent is to slow the decline in home prices by stimulating demand.
The move was hailed locally by some as a lifesaver for the real estate industry.
"The market has proven in the last six months that the primary driver is the first-time homebuyer," said John McKenzie, president of Coldwell Banker Plaza Real Estate in Wichita.
He pointed to the high percentage of homes priced below $100,000 — which tend to be starter homes — that have sold since spring.
The Wichita Area Association of Realtors said that 40 percent of all homes sold or pending sale since April 1 are for $100,000 or less.
Malcolm Harris, a finance professor at Friends University and an economist, said the tax credit has helped to slow the fall of home prices.
"Keeping the amount relatively limited is extremely important," he said. "You don't want to support overinflated housing prices."
But there are those who dislike the tax credit on principle.
Steve Brunk is a conservative state legislator from Bel Aire and a real estate broker.
He stands to benefit personally from the tax credit, he said. He recently put a rental house he owns on the market for $6,000 to $7,000 over the market price and got strong interest in it because of the activity generated by the tax credit.
Although he ultimately decided against selling it, he is now looking to buy a home for his family — and could be the recipient of the $6,500 tax credit.
The federal government already provides a tax deduction, loan guarantees and other inducements to buy a house, he said.
"While it's had a nice little effect, I would be dead-set against an artificial stimulus," Brunk said. "We already have enough stimulus."
It's also proved hard to accept for others in the industry.
Mike King is a real estate agent at Weigand's east office. He, too, is conservative in his views, but a beneficiary of government largesse.
He worries about the tax credit because homebuyers eventually will come to regard it as an entitlement, he said.
"I think it's a good thing for our business, but I'm kind of torn," he said. "As a conservative it's not something I completely agree with."