While real estate agents are hopeful the extension of federal tax credits for homebuyers will help improve home sales in Kenosha County, a University of Wisconsin economist is calling the program a waste of taxpayer money.

The Senate voted this week to extend an $8,000 tax credit for first-time homebuyers until May. The program, launched in January, had been set to expire Nov. 30. In addition, Congress approved a new tax credit for homeowners who purchase a new primary residence. That credit will provide a $6,500 tax refund to buyers who purchase a new home if they have owned their previous house for at least five years.

“I think it’s really going to create some activity for our market,” said Jamie Warosh, owner of Century 21 White Real Estate in Kenosha.

While there are a limited number of first-time buyers, Warosh said, the credit open to those who already own homes will provide a bigger incentive to buy. Combined with lower real estate prices, she believes sales will improve.

A Wisconsin real estate economist is calling the extension of federal tax credits for homebuyers a waste of money.

Morris Davis, assistant professor of real estate and urban land economics, said the tax credits are largely a giveaway to those who would have purchased homes anyway. “All we are doing is pulling sales forward,” he said.

Davis said there are a limited number of first-time buyers, and those who are qualified to buy would likely have done so without the credits. He said a better program to help troubled homeowners would be subsidies to lower-income owners facing foreclosure.

“What do we think we’re trying to do with this policy?” Davis asked. “Are we trying to print money and give it away? Then just print money and give it away.”

At the same time Davis — who in 2006 said home prices had become inflated and would likely fall back to 2004 levels — said he now believes real estate prices have hit bottom.

“I think now if you are thinking about buying a home, there’s probably never been a better time to buy,” he said, saying he does not believe prices will erode any further.

Shiela Heg, of United Country Lake to Lake Realty in Salem, said she believes the first-time buyer credit does help the market as a whole, saying that promoting new buyers also helps those trying to sell starter houses to move into larger homes. “It might be a stimulant to get them going,” she said.

Realtor Larry Cappozzo agreed the tax credits are helpful for the industry and prices are low.

But he said high unemployment and credit issues are putting real estate out of reach for many. “So now you’re going to get an $8,000 tax credit, but you don’t have a job,” he said. “If the tax credit is going to make or break a deal for someone, then they can’t afford the house.”