Oct. 28--Fear that the economy might fall back into recession is compelling Congress to extend unemployment benefits and incentives for homebuying that lawmakers hope will help sustain growth.

The threat of a relapse in housing has prompted Senate leaders to start negotiating an extension of the first-time homebuyers' tax credit, now set to expire Nov. 30. They hope to attach the measure to legislation extending soon-to-expire unemployment benefits and then pass both by the end of the week.

Economists are telling lawmakers that, with unemployment approaching 10 percent, an extension of benefits for the long-term unemployed would help prevent a collapse in consumer spending. In addition, the housing market is seen as a key ingredient of the economic revival.

"Unemployment and housing conditions could face further deterioration" without further actions by Congress, said Frank Lee, an economic analyst with CreditSights Inc. He said that millions of people who lost jobs in the worst of the economic crisis a year ago are getting close to the end of their 79 weeks of unemployment benefits.

"As unemployment benefits are exhausted, we are concerned that those who remain jobless and own a home will be subject to foreclosure risk," further imperiling the housing market, he said. And already the housing market is showing signs of retreating as builders put off construction plans.

"Double-dip fears are returning," said Richard Berner, chief economist at Morgan Stanley, referring to the possibility of the economy reversing course after a short period of growth.

Stimulus provisions enacted earlier this year induced a surge in auto and housing sales that likely produced robust growth of between 3.5 percent and 4 percent in the summer quarter.

But Mr. Berner said the sudden end of the popular federal programs, including the cash-for-clunkers auto trade-in program as well as the housing tax credit, will cause growth to flop again in the current quarter and be "bumpy" at best next year. Whether the economy pulls through will depend on whether Congress and the Federal Reserve continue to support growth, he said.

A report on Thursday is expected to show the economy surged out of recession in the summer quarter, thanks in large part to a jump in auto production and sales produced by the clunkers program and a rise in homebuilding and home sales inspired by the $8,000 first-time homebuyers tax credit.

But auto and retail sales cratered last month after the clunkers program expired, and many economists expect the housing market to take a dive just like the auto market's when the housing credit expires.