Buy a Home Now: Why Timing May Be Perfect

Deciding to buy a home is one of the biggest decisions most people make. But knowing when to pull the trigger on that decision burdens it with much fear and insecurity. AnnaMaria Andriotis at SmartMoney.com reports on why recent events in Washington have brought some clarity to the issue and why the signs all point to buying now.

The Obama administration'sproposals this morning to extricate the government from mortgage lending sounded the death knell for Freddie Mac and Fannie Mae. They weren't good news for homebuyers, either. In the proposals were changes that will mean more expensive mortgages, with higher fees and, probably, higher interest rates, larger down payments and, in the near term, fewer lenders to choose from.

The changes aren't effective immediately, and, some, if passed by Congress, won't go into effect for several years. Even so, they pose a dilemma for today's would-be homebuyers: loans are cheaper today than they're likely to be in the future – but one of the unintended consequences of the proposals could be another drop in home prices should higher mortgage costs dampen demand. Unfortunately, there's no single right answer, experts say. "Buyers shouldn't rush in – but there's no reason in most markets to delay waiting for something better to come along – it probably won't," says Barry Zigas, director of housing policy at the Consumer Federation of America.

Congress will ultimately decide whether Fannie and Freddie have a future, and whether the other changes could go into effect as soon as this fall. Here are the big three: