To buy or not to buy as housing market booms?

After being scared off by prices and soaring mortgage rates, buyers are making a frenzied return to the housing market.

With prices stabilizing and mortgage rates coming out of the stratosphere, loan applications soared 100 percent in a recent 80-day period at Dallas-based Lomas & Nettleton Company, the nation's largest mortgage banker. And the scramble for loans guaranteed by the Veterans Administration or insured by the Federal Housing Administration has overwhelmed back-office staffs and doubled processing time to between six and eight weeks.

The increase in buying activity ''is unique in my 36 years in the business,'' said James M. Wooton, president of Lomas & Nettleton, in a recent press conference.

The fact that there is renewed buying activity does not necessarily make every house purchase prudent. But experts contend that considering the outlook for home prices and mortgage rates, this is a relatively good time to buy. They caution, however, that unless inflation reignites, homes will not offer the rapid price appreciation they did in the 1970's.

''I see a house moving back toward being the consumer item that it has normally been,'' says Wes English, editor of a real-estate advisory letter.

The decline in mortgage rates which triggered the resurgence in housing still has a way to go, most economists say. ''Over the next three to five months I anticipate mortgage rates will come down another (full percentage) point,'' says Robert Gough, senior vice-president of Data Resources Inc. (DRI), an economics consulting firm. His forecast assumes there will be continued slack in the economy and the Federal Reserve Board will not pull back sharply on monetary policy.

Michael Sumichrast, chief economist for the National Association of Home Builders, says he thinks by spring, conventional fixed-rate mortgages will be offered at between 12 and 12.5 percent, while VA or FHA loans will be priced between 11.0 and 11.5 percent. According to DRI, fixed-rate conventional mortgages now average 13.95 percent. FHA and VA conventional loans now are priced at 12 percent.

The real cost of mortgages is still quite high. When current mortgage rates are adjusted for inflation, the real rate is about 8 percent, four times the average real rates over the past 32 years. ''This can not continue long term'' if inflation stays under control, Mr. Sumichrast argues.

While most forecasters think rates will continue to fall, Mark J. Riedy, executive vice-president of the Mortgage Bankers Association of America argues, ''We will be lucky if we get another quarter-point drop.''

One factor working against further declines, he says, is the large number of individuals with expensive mortgages who now want to refinance them at today's lower rates. And by spring he expects rates to climb 150 basis points due to upward pressure on interest rates caused by large federal deficits. Each full percentage point is equal to 100 basis points.

Most experts say the decline in house prices is about over. ''We have reached a bottom in the single-family home market,'' says Mr. English, editor of Wes English's Sound Advice, a newsletter published in Walnut Creek, Calif. He notes that if home prices are adjusted both for inflation and for below-market financing provided by sellers, on average current prices for both new and existing homes ''are down at least 25 percent,'' since 1975.

One reason prices are firming is that the unsold inventory of 246,000 new homes is the smallest since 1971. ''The inventory of new homes is very low,'' says DRI forceaster Gough. He notes that there is no reliable data on the inventory of unsold existing homes.

But the overhang of existing homes is not expected to cause further price declines. ''I would not anticipate seeing existing home prices go down,'' says James Christian, chief economist of the United States League of Savings Associations. In fact, he expects existing home prices to rise 5 to 6 percent next year. Mr. Gough expects an increase of 7.5 to 8 percent.

Those projected increases are national averages. Citibank economist William Garretson sees housing prices ''creeping up'' in 1983. The median new-home price is now $70,600 according to the Commerce Department, and he predicts it will rise to $75,500 during 1983.

Firming prices and a lean inventory are expected to spur housing construction activity. This year housing starts, the number of homes on which construction begins, will total about 1.025 million, sharply below the 2.02 million starts in 1978. But in 1983, housing starts should total 1.5 million, according to Mr. Garretson. He expects 1984 starts to total 1.9 million.

At bottom, the timing of a home purchase is a personal decision. But real-estate experts note that ''If you wait to the absolute bottom on interest rates, you probably will have seen the price of homes go up quite a bit,'' Mr. English says. And ''you can negotiate more off the price'' than can be saved from a small further reduction in interest rates, Mr. Sumichrast says.

Concludes Mr. Christian, ''Waiting for rates to fall is a dicey game.''