Oct. 21--One of the few bright spots in the nation's struggling housing market has been an $8,000 federal tax credit for first-time homebuyers.

And two local lawmakers said Tuesday they support extending the program, which is set to expire November 30.

"I'm co-sponsoring a bill to extend it," said Rep. Adam Schiff, D-Pasadena.

"Given the very tentative nature of the economic recovery, giving a new boost may be important to create new jobs -- particularly in Southern California where so many losses have happened in the construction industry."

The legislation Schiff referred to is HR 1993, the First Time Homebuyer Credit Extension Act of 2009.

Rep. David Dreier, R-San Dimas, said he supports extending the program but also wants to broaden it.

"I'm very enthused about the prospect of expanding this credit for first-time homebuyers to include everyone," Dreier said Tuesday.

"The reason is that many of the people who have lost their homes and have moved in with their parents because of foreclosures are the ones we want to help. So going beyond first-time homebuyers is I think is the right thing to do."

On Tuesday it was announced that applications for home building permits fell in September by the largest amount in five months, a disheartening sign for future home construction.

Some industry insiders attribute last month's 1.2 percent decline to uncertainty as to whether the Obama administration will extend the $8,000 tax credit.

Last month's decline was the second setback in the past three months and the biggest drop since a 2.5 percent drop in April.

It likely means construction will weaken a bit in coming months, partly because builders had accelerated projects to complete them before the tax credit expires.

The industry also faces other challenges, including record levels of home foreclosures and unemployment that is currently at a 26-year high of 9.8 percent and not expected to peak until next summer, said Sal Guatieri, an economist at BMO Capital Markets.

Locally, the unemployment picture has been far worse.

Los Angeles County's jobless rate hit an alarming 12.7 percent in September, up a half percentage point from August's 12.2 percent rate and well above the year-ago rate of 8.3 percent, the state Employment Development Department reported Friday.

Jack Kyser, founding economist for the Los Angeles County Economic Development Corp., said the number "certainly does grab your attention."

Baldwin Park's unemployment rate rose to 15.8 percent in September compared with 15.6 percent the previous month, the EDD said, and El Monte jumped to 15.6 percent last month from 15.4 percent in August.

The National Association of Realtors said the first-time homebuyer tax credit program has generated an extra 355,000 home sales.

The Associated Press contributed to this story.

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