Isakson recommended to the committee that Congress extends and expands the credit by increasing the eligibility limit to $300,000 to bring more buyers into the housing market.

“If we don’t do this housing tax credit, in my personal opinion, and extend it through midyear next year and take away the first-time homebuyer means test and raise the income qualification, we will have a dramatic and awful situation in the United States of America from which recovery is going to be even more difficult than we’ve experienced already,” Isakson testified.

Chairman Dodd is hoping to stimulate homebuyers that are “moving on up” by encouraging people to upgrade from their first-home to a more expensive one. Dodd said, with first-timers, “You’re living on a futon in a…bare bones deal, because you — you got that house…and you’re trying to make ends meet,” Dodd continued, “It’s that move-up market, where you start to get what I call sort of a ripple effect, that is always so important in housing.”