Housing and Economic News: 

The bill is expected to be approved by the House and signed by President Obama within days. The goal is to give the real estate market an added boost and expand the credit to existing homeowners.

The Senate today voted to extend and expand a tax credit for home Buyers as an added boost for the recovering real estate market, and also approved a provision to continue giving aid to the long-term unemployed.

The bill, adopted on a strong bipartisan vote of 98-0, also would extend and expand a tax benefit for businesses with losses. The House is expected to follow suit within days, and President Obama is expected to sign it into law.

To keep fueling the real estate rebound, the legislation would extend the $8,000 tax credit for first-time home buyers to April 30, 2010. It now is set expire at the end of the month (November 2009).  More importantly, it also would provide a new $6,500 tax break for existing homeowners who want to move up to a new home, as long as they have lived in their current residence for five consecutive years out of the last eight.

The bill also would increase the level of qualifying incomes to $125,000 for individual tax filers and $225,000 for joint filers. Those earning up to $145,000 individually or up to $245,000 jointly would get a smaller credit that decreases as income rises.

The tax credits apply to home purchases of $800,000 or less.

“Every economist will tell you we have to steady the housing market before the economy will turn around,” said Sen. Christopher Dodd (D-Conn.). “We can’t afford to let this tax credit expire now.”

With the unemployment rate at 9.8% and expected to go higher, senators voted to extend jobless benefits by 14 weeks in all states and 20 weeks in the hardest hit states, including California.

The $2.4-billion extension of unemployment benefits gained bipartisan support after it was written to cover all states, making it more appealing to senators. It would provide a longer extension of benefits in the 27 states now with unemployment rates of 8.5% or higher. California’s 12.2% unemployment rate in September trailed only Michigan, Nevada and Rhode Island.

Congress included an extension of unemployment benefits in the economic recovery bill approved this year, but up to 600,000 people have already exhausted their benefits, and an additional 700,000 are scheduled lose them by the end of the year, according to the National Employment Law Project.

For all businesses, the measure would allow them to use any losses this year or last year to offset taxes paid in the previous five years. A similar measure was included in the economic stimulus legislation approved earlier this year, but was limited to small businesses.