For most of the fall Congress heard a significant clamor from the real estate and home construction industries to extend the tax credit for home buyers. At its peak, there were at least 20 different bills that would have extended the credit, which was due to expire Nov. 30.

The one that finally passed extends the $8,000 first-time home buyer credit through spring and summer, and adds in a smaller credit of up to $6,500 for move-up buyers. It’s not the most generous of the possible choices, but it was better than some.

But a question remains – Is it enough to keep the momentum going? In talking with several area Realtors, I heard some cautious optimism – with the emphasis on the cautious part. No one wants to look a gift horse in the mouth, but you’re not hearing shouts of joy yet, either.

“I think the market will tell us soon enough,” said Dave Hanna, broker/owner of SourceOne Realty, which has offices in the city and western suburbs. “There are still too many moving parts. It was as good as could be expected and it’s good that they were willing to extend it to everyone.”

While the pot is a little sweeter for first-time buyers, even for move-up buyers the $6,500 will cover closing costs, he notes. And it’s a nice check to get at the end of a year in which you made a big purchase.

Still, the $6,500 tax credit is probably less of a sweetener than overall home prices themselves. Given that many area properties have depreciated up to 20 percent or more, that alone should be a significant incentive.

If, as an example, you are looking at a home that previously was valued $300,000 and is now priced at $239,900, that savings is more significant than the tax credit.

But add them together, buy that home for $233,400, and now you’re really talking.

One of the major criticisms of the first tax credit – and of extending it – was that by one count, only around 7 percent of those who earned their tax credit said their purchasing decision was based primarily on that incentive.

“Unless they poll everyone, who knows if they would have bought anyway?” said Mike Drews, a Realtor with Charles B. Doss and Co., in Oswego and president of the MainStreet Organization of Realtors.

But, he notes results of the first tax credit program “were phenomenal. Sales for MainStreet were up [more than] 30 percent over 2008, and contract pendings in October were up 70 percent over a year ago. A lot of first time buyers were trying to get in before the deadline.”

If that sort of movement occurs again, and it seems likely that it may, it could help clear out some of the distressed properties that are dragging down sales prices, adds Hanna.

“We want to see the existing inventory sold,” Hanna said. “Let’s get that out of the way so we have a normal market.”

The short version of the new home buyer tax credit is this: First time buyers will continue to get an $8,000 tax credit, which is much better than a tax deduction.

The tax credit will subtract $8,000 from taxes owed at the end of the year, and if the buyers owe less than $8,000 in taxes, they’ll get a refund of the difference. Anyone who earns $125,000 or less will qualify for the full credit; couples can earn up to $225,000. Partial credits are available up to incomes of $145,000 and $245,000. Those income guidelines are higher than the tax credit that expires Nov. 30.

Move-up buyers who have lived in their own home for five consecutive years out of the last eight qualify for a tax credit of up to $6,500. Buyers must sign a binding contract for the property by April 30, 2010, and have to close before July 1. Only homes priced under $800,000 qualify and the buyers must live in the home as their primary residence.

You can find out more at www.FederalHousingTaxCredit.com. First-time buyers also should not forget about Illinois’ Home Start Down Payment Assistance Loan, a forgivable loan of up to $6,000.

What if you are not planning to buy - Why should your taxes be used to help other buyers?

Taxpayers need to look at the big picture, Hanna said.

“Everybody should understand that this is for their own good,” he said. “It’s not just so that a stranger gets a handout, it’s so we can stabilize the market.”