According to news reports this morning, Senate negotiators reached a tentative deal on extending and slightly expanding the $8,000 first-time home buyer tax credit. Here’s the tax credit new deal Senate negotiators apparently reached:

* The current $8,000 first time home buyer tax credit would be extended for contracts that are finalized by April 30, 2010 and close by June 30, 2010.

* A new $6,500 tax credit will be available to some existing homeowners who lived in a home for a “consecutive” 5 years out of the past 8 years.

* The income limits will be raised, so both tax credits will be available to those individuals earning up to $125,000, or up to $250,000 for married couples.

So what’s really going on? Yesterday’s perfectly awful and surprising housing numbers finally tilted the axis toward extending and expanding the credit. The Commerce Department reported that new home sales fell an unexpected 3.6 percent to an average annual pace of 402,000 sales. Economists and industry observers had been expecting sales to rise 5 percent.

Realtors, mortgage lenders and home builders said that the fall in home sales would mirror what would happen if the tax credit wasn’t extended - countering HUD secretary Shaun Donovan’s contention that nothing bad would happen if the tax credit was allowed to expire on schedule. They point to last month’s housing numbers as a sign of things to come if the tax credit died on November 30.

To read the complete article, logon to Ilyce Glink's column at CBSMoneyWatch.com