If you believed the headlines or the endless drum beat about subprime lending on cable television news, you would think that the pot of mortgage money has dried up completely. Nonsense! The vast majority of home buyers are seeking conventional, conforming mortgages at or below $417,000. These loans are purchased by Fannie Mae and Freddie Mac, both federally chartered organizations. While underwriting standards may have been tightened for all loans, credit-worthy home buyers should have no problems in finding conventional, conforming mortgages at very attractive rates – in the range of 6 percent for fixed rate, 30-year loans.

And Congress earlier this year passed a stimulus package that will allow Fannie Mae and Freddie Mac to purchase more mortgages in high-cost markets through the end of 2008. Plus, the Federal Reserve has moved aggressively in the past several months to cut interest rates and inject more liquidity in the financial markets. These developments will increase the availability of money for jumbo loans, although rates on those loans are a bit above their usual premium over conforming loan rates and downpayment requirements are higher. Nonetheless, these are the facts: Mortgage money is available at a very attractive price for credit-worthy borrowers.

While foreclosure rates have increased in the past year, almost all American home owners are making their mortgage payments on time. More than 96 percent of prime borrowers – the bulk of the mortgage market – are up-to-date on their payments. Most foreclosures are concentrated in the once super-heated markets in California, Florida, Arizona and Nevada and the upper Midwest states of Michigan, Ohio, Minnesota and Illinois, which have been hit hard by job losses, plant closings and depressed local economies.

But again, we need to put this problem into perspective. As noted above, California, Nevada, Arizona and Florida are at the epicenter of this problem. These four states accounted for 89 percent of the total increase in new home foreclosures, according to the Mortgage Bankers Association’s 2008 first quarter data. California and Florida alone account for 36 percent of all foreclosure starts in the U.S. and 42 percent of subprime ARM foreclosure starts nationwide. Nationally, about 81 percent of subprime borrowers are still paying on time every month.

It’s also important to remember than more than one-third of all single-family homes are owned debt free —without any mortgage – and home owners nationwide have built up $9 trillion in equity that provides a good cushion against any decline in values. Also, a high number of defaults on loans to date have been among speculators or investors who were looking for quick profits and subsequently walked away from their investments when the housing market cooled.

Last August, President Bush launched the FHASecure Initiative, an important new solution for subprime home owners. To date, FHASecure has helped more than 130,000 families refinance their mortgages and stay in their homes. That number is expected to reach 300,000 by year end.

And the HOPE NOW public-private partnership alliance whose mission is to maximize homeownership and minimize foreclosures, has announced that since July, more than 1 million struggling home owners have received a work out, either a loan modification or repayment plan that helped them avoid foreclosure.

It is a virtual given that over time home values will stabilize and then edge upward with the next recovery. To argue that home values will continue to decline and will never recover, somebody has to make a convincing argument that it will cost less to build a new home five years from now than it does today. That’s not going to happen.

Despite today’s housing slowdown, the price of bricks, mortar, lumber, copper and other products used in home building continues to go up due to worldwide demand and upward pressure on commodity prices generally. Look at anticipated population and household growth; consider the increasing scarcity of available land in metro markets where jobs are located and where people want to live. And the cost of getting land entitled will continue to go up because of more and more restrictions and fees being added by local governments. As inventories wind down, demand will rise and so will prices. Over time, all these factors will help drive up the cost of housing.

Different economic and job-market conditions directly affect demand for new and existing homes in every market. Treasury Secretary Paulson made the same point in a March 26, 2008 address to the U.S. Chamber of Commerce: “We do not have a national housing market,” he said, adding that housing markets are unique and those experiencing the biggest price corrections are in areas that had the greatest overbuilding.

Part of the problem is due to an influx of speculators in some large markets who helped drive prices up to unsustainable levels. For example, all the markets that posted the largest average decline in home prices during the past year – Las Vegas, Los Angeles, Miami, Phoenix, San Diego, San Francisco and Tampa -- have appreciated in value by more than two-thirds since January 2000, according to the latest S&P/Case-Shiller home price statistics. Two of these markets – Miami and Los Angeles – were up by more than 100 percent over this period.

If you try to wait and time the market until it hits rock bottom, you are likely to lose out. Just as no one can accurately predict the peaks and valleys of the stock market (name one person who sold their tech portfolio in April of 2000), the same holds true for housing. If you sit on the fence and wait for the absolute best deal, you could end up literally waiting for years. And most likely, your guess on market timing would be wrong. But if you choose to buy now, you will not only be in the driver’s seat during the buying process, you will also reap the gains of price appreciation once you become a home owner. Remember, those who purchased homes in the early 1990s during the last big economic and housing downturn came out as big winners.

It’s usually better to trade up in a buyer’s market, like the one we are in now. While the value of your house has fallen, the prices of higher-end homes have also dropped. Your home value is now down 10 percent to $270,000. But don’t forget that in today’s buyer’s market, higher priced homes are also dropping in price.

But for argument’s sake, let’s say that a $500,000 move-up home has also dropped 10 percent in value and now sells at $450,000. If you sold your home today for $270,000 and purchased the larger house for $450,000, the difference in price would be $180,000.

But if you waited to recoup the 10 percent value on your home and sold it at $300,000, chances are that same move-up home would also move up in price to at least $500,000. That’s a $200,000 price difference between the two homes. So by selling today, you would actually save $20,000. And most likely, by jumping into the market today your savings would be even greater because consumers have more bargaining power when shopping for higher-end homes in a buyer’s market.

The best way to “play it safe” is to actually buy a home. And here’s why. Studies show that owning a home is the best way to build household wealth. The sooner a person owns a home, the faster they begin to build up equity and wealth. When you buy a home, you are also purchasing price stability, knowing that you will pay the same monthly payment for the life of your 30-year, fixed-rate mortgage.

Now consider the current rental market. While home prices have been moderating, rents continue to rise faster than the rate of inflation. Where is the economic security in not knowing how much your rent will increase in the next three years? You don’t receive any tax benefits from paying rent, nor do you accumulate any price appreciation, as you would if you owned a home of your own.

All of the economic fundamentals show that this is a good time to buy a home. And continuing strength in rental demand signals that there is upward pressure on rental rates. The real risk isn’t in buying a home, it’s continuing to rent.

Interest rates for 30-year, fixed-rate mortgages currently stand in the 6 percent range and are extremely favorable for buyers. In fact, they are hovering near 30-year lows. But waiting to time the market is a dangerous – and losing -- game. Even those who follow the market for a living can’t figure out when interest rates will bottom out. If they could, they would all be multi-millionaires. Because interest rates are near historic lows, it is much more likely that they will head higher in the future as opposed to moving even lower.

And home prices don’t necessarily move in unison with interest rates. So, if you decided to roll the dice and wait to purchase a home, and the price were to actually drop $10,000 from where it is today, you could still end up losing money. How? If interest rates were to move up by a half-a-point during this period, the savings on the reduced home price would be more than offset by the higher monthly payment you would be making over the life of the loan.

In short, the smartest and safest time to buy is now. We know that interest rates are low today. We know that home prices are down. We know that there are plenty of homes on the market to choose from. We know that sellers are willing to bargain. And we know that builders are willing to offer attractive incentives to get your business. Any, or all of these favorable variables could change for the worse six months from today.

Thanks to the concept of “leveraging,” purchasing a home is by far the best long-term investment. Leveraging means putting down a small amount of money to earn a big return.

For example, say you use that $10,000 to purchase a $250,000 home, and the house appreciates a modest 3 percent during the first year. That means after one year, the house would be worth $257,500 – a gain of $7,500. Your annual return on your $10,000 investment would be 75 percent.

By contrast, putting the same $10,000 in the stock market and posting a similar 5 percent gain would only net a $500 return on investment.

And as a home owner, your savings continue to grow in two ways. Every year, a greater portion of your monthly mortgage payment goes to the principal, reducing the overall loan amount. Second, your home appreciates over time, making it one of the very best financial investments.

And don’t forget the important tax incentives. Owning a home is by far the biggest and best tax break for middle America. In most instances, all of the mortgage interest and property taxes you pay in a given year can be fully deducted from your gross income to reduce your taxable income. These deductions can result in thousands of dollars of tax savings, especially in the early years of the mortgage when interest makes up most of the payment. To look at this another way, if you are in the 28 percent tax bracket, you only pay 72 cents on the dollar in mortgage interest payments.

If you continue to wait, you may never be able to afford to get into the housing market. Even as house prices fall in many parts of the country, there are markets in which house prices continue to rise, albeit at a moderate rate. Meanwhile, rents also continue to climb. The best way to build household wealth is to own a home. Once you become a home owner, you are able to take advantage of the generous tax deductions that homeownership offers, and you begin to build equity in your property. As your property builds in equity, you can use those gains to sell your starter home and afford to move into a bigger house.

With so many homes on the market to choose from, your best strategy may be to scale back expectations for your dream starter-home. Instead of trying to buy a 2,000-square-foot home, consider shopping for a 1,500-square-foot home. Remember, the sooner you make the jump from renter to home owner, the quicker you begin to create and build up wealth for your family. After a few years, you will be able to leverage this investment and buy a larger house.