With prices predicted to keep falling through the coming year or even longer, one might question the wisdom - even the sanity - of buying a home now when even better bargains probably await.

But people are buying. Armed with attractive mortgage-interest rates and a bountiful supply of houses to choose from, some bargain-hunters say it is the time to act.

"If you think there is blood in the streets, you want to be buying," said Vince Allegra, who in late November swooped in on a house in Chicago's west suburbs that had languished on the market since spring.

Dickering with the relocation company that owned the house, he snagged it for $860,000 - less than the original list price of $1.1 million and even below the $950,000 it sold for in 2005, he said. Allegra, a money manager for high-net-worth clients, believed that the market was near enough to a bottom to make a deal worthwhile.

"The problem for buyers is that there is no such thing as 'the market,' " said Pennsylvania economist Joel Naroff. "Every community is its own special market, and each different submarket will bottom out at a different time.

Naroff has predicted that the country is 12 to 18 months away from a "normal" housing market in which sales are growing and prices are stable or rising.

Nonetheless, Naroff bought a house two months ago. He says his decision made good economic sense to him despite what has been called the worst housing market since the Depression.

"Prices were down quite a bit, and it's a house I wanted in the place I wanted," Naroff said.

The National Association of Realtors reported early this month that the number of home-sales contracts signed in October ticked upward ever so slightly, for the second month in a row. But the Realtors also reported that the nation's October sales were a sobering 18.6 percent below those of October 2006, which were lower than the year before.

Except for the perennially optimistic Realtors group, the economic chorus seems largely in agreement that prices will head south in 2008. Mortgage financier Fannie Mae on Dec. 5 predicted a 5 percent drop next year.

Interest rates are nearly at two-year lows, according to Freddie Mac, and may be on the rise.

Even if rates don't go up, loans will become more expensive for some borrowers. Fannie Mae and Freddie Mac, reacting to marketplace turbulence, have said that they will add a 0.25 percent charge to mortgages they buy or guarantee, effective March 1, amounting to $1,000 on a $400,000 loan.

The two entities also are rolling out other fees for loans they buy from applicants who put down less than 30 percent and have credit scores in the mid- to upper-600s, formerly considered in the "prime" category. The fees may add thousands of dollars to some loan costs.

Another spur to buy now: an expected downshift in homebuilder largess.

Many builders have been offering big-ticket sales incentives, ranging from free granite countertops to finished basements to cash discounts. But now some complain that it has only inspired some buyers to wait to see what goodies will be offered in the next wave of incentives. That may be about to change.

"Builders cannot survive if we are constantly giving away profits," said Gail Payonk, of Wiseman-Hughes Enterprises, a builder based in Wheaton, Ill. Payonk said her company probably will pull back many incentives after the Super Bowl on Feb. 3, which is traditionally the start of the spring home selling season. She expects that other builders are similarly minded.

Although the overall housing outlook is poor, there are reasons for some individuals to jump into the market now, he said.

"If you're looking at an area where there is job growth and economic growth and thinking about being there for five years, now may be a good time to buy," said Mark Dotzour, chief economist at the Real Estate Center at Texas A&M University."But if you have some likelihood that you would have to move in one to two years, then I would be nervous."

Others are not so encouraging.

"No, it is not a good time to buy a house," said Susan Wachter, professor of real estate at the Wharton School of Economics at the University of Pennsylvania, who sees further turbulence in the economy.

"Prices are going to decline in the next period, by another 5 percent or more," she said. "Without a recession, 2009, not 2008, could see the bottom of the market; with a recession, all bets are off." *