Congress is in recess. But when lawmakers return after Labor Day, they’ll be contemplating whether to extend their showpiece housing legislation — the first-time homebuyer tax credit. Bills are pending in both the House and Senate that would lengthen the window for those purchasing their first home in at least three years, to take advantage of the $8,000 federal credit with no repayment obligation — an allowance currently set to expire on November 30. Congressional leaders such as Senate Majority Leader Harry Reid, whose home state of Nevada has been particularly hard-hit by the housing bust, strongly supports such an extension. Other lawmakers want to expand more than just the deadline for the credit. Rep. Howard Coble of North Carolina is proposing to remove the income restrictions currently in place ($75,000 for individuals or $150,000 for couples) and the requirement that the home be a first-time purchase — essentially making the tax break available for all primary residence purchases.

Industry groups agree that opening up the homebuyer tax credit could be a game-winning home run. Both the National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) say the tax incentive has had a hand in the recent rebound of home sales. The organizations have launched full-force grass roots campaigns to lobby lawmakers in their native districts during the recess to extend the credit for another year and maybe even expand its scope. NAHB is hitting lawmakers with hard numbers. The homebuilders group says a one-year extension of the tax credit program to all homebuyers would increase annual home sales by 383,000 units. On top of that, NAHB points out that the ripple effects would give a much-needed lift to the economy, creating nearly 350,000 new jobs nationally. While some argue that a tax credit extension would cost the federal government billions in lost revenue, NAHB notes that it would bring additional tax revenue to local governments, in addition to the extra income generated for private businesses — a trickle down that would reach to Main Street. “By enacting provisions that stabilize America’s real estate markets, you are helping small businesses and America’s communities thrive and prosper,” NAR President Charles McMillan testified on Capitol Hill last month, speaking in support of a tax credit expansion. If extended, market observers say the first-time homebuyer tax credit could prolong recent gains in home sales and give another boost to what many analysts say is a housing market coming off the DL.