Housing bill won't solve market's problems

The bill was widely praised by real estate industry groups but doubts remain about how much real-world impact it will have for consumers.

"This isn't going to be the catalyst for a better housing market," said Mark Zandi, chief economist at Moody's Economy.com. "It may staunch some of the downturn, but it's going to have a very modest positive impact."

The vote on the bill came after months of negotiations between House and Senate lawmakers and the Treasury Department. President Bush initially opposed it but now could sign as early as this week.

The highlights include: $300 billion to provide more affordable mortgages to troubled homeowners, nearly $4 billion in grants to help communities fix up foreclosed properties and a $7,500 tax credit for first-time homebuyers.

Andrew Lenz, a 27-year-old first-time buyer in Minneapolis, said the tax credit won't affect his decision to make an offer soon on a foreclosed townhome, but added, "Every little bit helps."

And plenty of first-time buyers won't get help.

The tax break only applies for homeowners who purchase between April 9, 2008 and July 1, 2009. The full amount of the credit also is only available for individuals with incomes under $75,000 or couples earning less than $150,000.

Moreover, it will have to be paid back, interest-free, over 15 years.

In Baltimore County, Md., where foreclosure filings between January and March were running at nearly four times last year's levels, Liz Glenn was grateful to see the provision in the bill for $3.9 billion in grants to help local governments buy and fix up empty homes.