According to the Treasury Department, by the end of August, 314,000 home buyers had filed tax returns taking advantage of the $8000 first-time home buyer tax credit. That's at a cost of around $154,000,000. The Treasury estimates that as the credit stands, expiring Nov. 30th, 2009, 1.5 million buyers will use the credit. It also estimates that 200,000 buyers who might not have otherwise purchased a home, will do so solely because of the credit. The Realtors put that at 300,000, so I guess the reality is somewhere in between.

• Slideshow - Million Dollar Homes Across America: Then & Now

Currently, Sen. Johnny Isakson, (R-GA), a former real estate broker, is pushing not only to extend the credit to Dec. 1, 2010, but to raise the maximum to $15,000 and make it available to all home buyers, not just first-timers. That's the most expensive proposal. Sen. Ben Cardin, (D-MD), is looking for a six-month extension of the current credit, and Senate Majority Leader Harry Reid supports that bill. No time frame for it yet, but we're counting down.

Obviously the Realtors and Builders are pushing hard for an extension and expansion of the credit, and they have some heavy hitters on their side.

Dr. Kennth Rosen, special real estate advisor to the World Economic Forum and Chair of the Fisher Center for Real Estate and Urban Economics at Berkley's Hass School of Business, claims that the tax credit, "has been the primary cause of the recent return of buyers to the for-sale housing market...particularly for homes at the lower end of the housing market." Rosen sites a huge decrease in inventory at the low end of the market and gains in sales. But he also sites a "prevalence of foreclosure auctions and short sales....In many markets, 50 percent to 70 percent of completed home sales are resales of lender-owned properties." That's bringing down prices at the low end, and could also be spurring demand.

• Slideshow: 10 Most Affordable Metro Areas

On the other end of the spectrum,Ted Gayer, Co-director, Economic Studies, The Brookings Institution, claims the "tax credit is very poorly targeted. Approximately 1.9 million buyers are expected to receive the credit, but more than 85 percent of these would have bought a home without the credit. This suggests a price tax of about $15 billion – which is twice what Congress intended – for approximately 350,000 additional home sales. At $43,000 per new home sale, this is a very expensive subsidy."

Grayer adds, "It’s even worse in that most of the new home sales just result in moving renters to owners, which does not absorb the excess supply of houses. The core of our weak housing market is that the housing bubble led to too many homes being built, and the recession has led to a decline in household formation. By moving renters into owners, the tax credit does not address either of these causes."

As we head toward the deadline, and as some of summer's gains in housing seem to be turning ever-so-slightly, the debate over the tax credit will heat up and the numbers will come flying. There's no question that the tax credit stimulated much-needed demand, and will continue to do so if it's extended. Its positive effect on consumer sentiment also cannot be understated. I would just caution that we consider very carefully housing stimulus and how far it should go, given the only newly-accepted reality that not everyone can afford to own a home.

• Slideshow: 10 Most Popular Relocation Cities

Questions?  Comments?