The U.S. House of Representatives voted Thursday to extend and expand the first-time homebuyers' tax credit.

Earlier this year, in an effort to stabilize the badly bruised housing market, the government offered an $8000 tax credit to first time homebuyers. Now, the program that was set to conclude at the end of November has been extended to include contracts signed before the end of April, and closed on before the end of June.

Taxpayers will also be sponsoring an expansion of the housing stimulus plan, which will now include a $6500 tax credit for some current homeowners looking to upgrade. To qualify, one must have owned his or her current home for five consecutive years within the last eight.

Investors who bought on rumors that an extension was in the works are now selling the news, dragging the Homebuilder Stocks Index lower in the last session of what has been a strong week.

As explained by Fox-Pitt Kelton analysts in Barron's, renewal of the tax credit program has already been factored into the valuations. The analysts noted Toll Brothers (NYSE: TOL - News) specifically as one of the more defensive names in the group.

Over the last week Toll Brothers has underperformed its large-cap peers. DR Horton (NYSE: DHI - News), Pulte Homes (NYSE: PHM - News), and Lennar (NYSE: LEN - News) are all ahead by 5% or more in the in five days. Lennar and DR Horton are both winners in today's session.

Today's other winners include Indiana-based modular home builder Skyline (NYSE: SKY - News) and Chinese Xinyuan Real Estate (NYSE: XIN - News), up by 2% and 7% respectively.

Over the last month, Beazer Homes USA (NYSE: BZH - News) and Champion Enterprises (NYSE: CHB - News) are among the biggest laggards. Beazer is off by -15% for the period while Champion has plummeted by -50%.

As of this writing, the Homebuilder Stocks Index is one of the 75 worst-performing tickerspy Indexes over the last month, down by 5.4%.

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