A new drop in the housing market is giving Republicans pause on plans to privatize home mortgage giants Fannie Mae and Freddie Mae.

Throughout the financial reform debate in 2010, Republicans argued that majority Democrats should include Fannie and Freddie in the discussions, since the vast public-private entities securitized the mortgages that were at the epicenter of the crisis. Republicans pledged to end the taxpayer bailout of Fannie and Freddie.

With Republicans taking control of the House next year, privatizing Fannie and Freddie is still a top priority, but the timetable is slipping. Standard & Poor’s Case-Shiller Home Price Index, released Tuesday, showed that home prices fell in all 20 metro areas surveyed, wiping out nearly all the gains from the $8,000 federal tax credit for first-time home buyers, which expired on April 30.

The Republican set to chair a key finance panel says that the risk of a new shock to fragile housing markets is forcing a delay of at least a year.

“We are not interested in pulling the plug immediately on Fannie and Freddie,” says Rep. Randy Neugebauer (R) of Texas, the incoming chair of the Oversight and Investigations Subcommittee of the House Finance Committee. “We need a more measured approach that will faze them out over a period of time, given the impact on the markets.”

Since the federal government took over Fannie and Freddie in 2008, Congress has spent more than $145 billion to keep the institutions viable. The Congressional Budget Office estimates it will take $400 billion to cover ongoing losses on the mortgage-backed securities they guarantee.

Rep. Jeb Hensarling (R) of Texas drafted legislation last March calling for a two-year exit strategy for taxpayers. If market conditions were adverse, the draft law proposes adding another six months to the federal conservatorship and then an “orderly wind down” over a 10-year period.

Congressman Neugebauer sees the plan as too aggressive in light of the weak housing market.

Meanwhile, the Treasury Department is developing its own analysis on a way forward for Fannie Mae and Freddie Mac, expected to be released in January. Treasury officials have been working with key stakeholders to chart a path that will ease the burden on taxpayers while avoiding damage to the housing market.

Since 2009, Fannie Mae has helped some 600,000 families avoid foreclosure, Fannie May executive vice president Terry Edwards reported at a Dec. 1 Senate hearing. Home builders and real-estate agents are urging Congress not to move hastily to upend the main financing support for home mortgages.