Homebuying activity is picking up in many U.S. markets, sparking debate about whether a federal tax break deserves kudos for the modest turnaround.

Last February’s economic stimulus package included a tax credit for first-time homebuyers who purchase a primary residence before Dec. 1. Eligible homebuyers can receive a break of up to $8,000 on their taxes so long as their gross adjusted income does not exceed $75,000 for singles or $150,000 for married couples.