You're not alone in this situation....and understandably so.
Our advice is to get into the game by being active in the search process without having made up your mind to buy or rent. Once you have a feel for neighborhoods, values, and can clearly identify opportunity you will be ready to make your decision.
If it's the right property, you will know. Look for the perfect home. One that meets your families total needs. Be sure it is in an ideal location. One where homes are tending to hold their value. AND find the home that is priced so right, that you can't afford to walk away.
Clarity will come, if you don't take yourself out of the game.
October is a long way off. In your position I would set yourself a deadline of the end of July to get into contract. In the meantime, get to know the area as well as you can. Hopefully you are working with an agent who will take the time to show you around and explain the pros and cons of various neighborhoods to you.
Interest rates are very low now but I doubt they will raise too much in the next few months. Even so, keep an eye on them and be prepared to move quickly if they start to rise.
A final thought - you say you are gunshy - focus on bank owned foreclosures if you can. There are some great deals out there in this area. Remember that banks don't want to own property and they have no emotional connection.
Good luck to you.
Bernard Gibbons, Realtor, e-PRO Certified Internet Specialist
J. Rockcliff Realtors, 15 Railroad Avenue, Danville, CA 94526
Phone (925) 997-1585