Concerns that the recent rebound in home sales could possibly relapse when the popular government tax credit offered to first-time home buyers ends later this month were addressed this week when new legislation was approved by the U.S. House and Senate, which will not only extend the program for another six months but also expand it to include more than just first timers.

The highly anticipated extension is aimed at keeping the home sales momentum going at a most fragile point in the recovery.

"We're almost there," says Bill Chee. "The gross domestic product was up 3.5 percent in the third quarter, the first time in a year. The economy is on the mend. The stimulus is working, but it's a critical time to be mindful and not scale back too early."

This is the third, and likely final, version of the tax credit. One of the major drawbacks to the original 2008 tax credit was the fact that the money ultimately needed to be paid back — it was more accurately an interest-free loan. The 2009 version, which significantly tipped the motivation scale for buyers since it went into place several months ago, eliminated that requirement. This week, the credit was extended through April 30, 2010, and it has been expanded to include a new credit of up to $6,500 for owners of existing homes who want to trade up to something bigger.

Joe Robson, chairman of the National Association of Home Builders, says the program has proven to be a powerful economic incentive.

"We commend lawmakers for acting in a bipartisan manner to extend the first-time home buyer tax credit beyond its Nov. 30 deadline and to expand it to a wider group of home buyers," says Robson.

Critics of government intervention are skeptical that tax credit measures will help the market recover, citing studies that have found that a large majority of home buyers who have taken advantage of the credit would have bought their homes anyway. But proponents say the increase in sales, especially among first time home buyers, is undeniable.

"It's proven to be an effective incentive," adds Chee, a 40-year veteran in the real estate field. "Sales of first time home buyers at our company tripled this year. And we're confident that this extra push will be enough to keep the inertia going and get the housing market back on track."

Chee also points out that including the incentive for move-up buyers will continue the upward push on our local market. Opening up the opportunity to this new segment of existing home owners is intended to give more prospective home buyers the incentive to buy now. And, because they'll need to sell first, the entry level market will be infused with the additional — much needed — inventory.

"We've seen inventory in the $400,000 to $600,000 become depleted due to the influx of first timers into the market this year," says Chee. "Now with the additional incentive for move-up buyers, we're hoping to see more inventory added to that depleted price range, more sellers taking advantage of the tax credit to upgrade."

The IRS defines a move-up buyer as a homeowner who has lived in their home for at least five years. Additionally, homes that cost more than $800,000 are not eligible for the credit.

"The substantial rise in home sales we've seen over the past few months proves that the tax credit is working and is being used by buyers who were waiting for the right opportunity to get into the market," says Charles McMillan, president of the National Association of Realtors. "This important incentive is helping to stabilize the housing market, stimulate the economy and create new jobs in communities all across our great nation. Extending and expanding the home buyer tax credit will enable even more families to take advantage of current low interest rates and affordable prices to invest in their future through homeownership."

Experts agree the credit will provide a much-needed boost to the wounded housing market and economy.