The Obama administration is weighing a proposal to extend and expand the $8,000 first-time homebuyer tax credit that Realtors and experts say has helped to boost home sales.

The tax credit, coupled with lower prices, has been vital in bringing a flood of first-time buyers to the market, they say.

If you look at the types of homes that have been trading in Massachusetts, it looks like first-time buyers have helped the market pick up a bit.

For example, July home sales rose 12 percent, and sales in the lower-end of the market — those that first-time buyers would most likely purchase — were driving that increase.

A total of 1,733 single-family homes priced between $250,000 and $400,000 sold in July 2009, up 13 percent from July 2008, according to The Warren Group.

Meanwhile, homes with price tags of $700,000 and higher fell 5 percent in July compared to a year ago

Incentives like this tax credit are effective because they have a deadline and create a sense of urgency. Prospective buyers, knowing that the tax credit is temporary and time is running out, are more likely to hurry and make a decision. If consumers know that lawmakers might extend the credit or even expand it, many may just take the wait and see approach – particularly if they’ve already put off homebuying for a long time.

But as I mentioned in an earlier blog post, it really doesn’t matter how much money the government throws at would-be buyers.

Consumers who have concerns about job security or those who’ve had their paychecks slashed aren’t in a position to make the biggest purchase of their lives.

Ultimately, the key to the long-term health of the housing market will be stronger employment numbers and business growth.