Home ownership dream fades in face of uncertain market. Steep costs, changing life-styles turn many Americans to renting

When Wendy R. went to look for a condominium, she says she was struck by one thing: the super-high price for a small, poorly constructed place. ''Prices are really inflated,'' she comments, saying that the kind of place she wants in a safe city area was far beyond her budget. The cost, combined with a reluctance to get ''tied down,'' contributed to her decision to choose an increasingly prevalent option these days: renting.

Renting is not the choice of most Americans. Indeed, part of the American dream has long been tied to owning one's own piece of turf. Ownership figures have climbed steadily since the US Census Bureau started tracking them in 1947.

Contributing to the growth was the formation in the 1930s of the Federal Housing Administration, which offered long-term, fixed-rate mortgages with monthly payments that were comparable to rent figures.

For the first time, however, the rate of home ownership in the United States is remaining relatively flat, even declining slightly, according to yearly US Census Bureau figures. Based on the conditions of the late 1970s, approximately 600,000 people who were expected to own a home by now are renting instead.

Steep interest rates and high price tags have pushed the typical monthly mortgage payment far higher than an average rent payment. Unemployment, an increase in the number of transient workers, and a severe decline in household formation have contributed to the drop.

The result is what Selwyn Enzer, associate director for the Center for Futures Research at the University of Southern California (USC), calls a ''turbulent and uncertain'' market that is readjusting itself after the whirlwind price rises in the late 1970s. But there have yet to be any clear signals that steadier interest rates and employment figures will lead to a resurgence of home ownership.

Home ownership, however, has always been something of a given in the US, says Arthur F. Young, chief of the Census Bureau's housing division, pointing out that the large, well-appointed homes in housing magazines and on television establish high aspirations. Lower household-formation figures indicate, he feels , the inability of single people, and even young couples, to afford living alone.

''Will we have to reeducate people now to expect less?'' he asks.

Prof. William Apgar of the Joint Center for Urban Studies of MIT and Harvard University is concerned about the lower third of Americans that are simply unable to consider ownership.

''The worst thing that's happened in the past four years is the hardening of the line between owner and renter classes,'' he comments, feeling that more attention should be given to this group, which, unlike the middle class, has little ability to influence legislation in this area.

There is more to the hesitancy of the market than just high interest rates. Dr. Enzer of USC says people have been finding in recent years that they can actually lose money when selling their house. Since housing is no longer the phenomenal investment it became at the end of the 1970s, many potential investors figure it's easier to rent for now and invest dollars elsewhere.

''In times of uncertainty,'' he adds, ''people sit on the sidelines and wait. So builders aren't sure what to build.''

At the Census Bureau, Mr. Young notes that ''we are in a new world,'' where it is still not clear how people will react if interest rates of 13 to 14 percent become the norm. And if buying a house demands two paychecks, couples who fear ''the economy will turn around and bite them'' may be more cautious about such a large purchase, he says.

Life-style changes also are influencing the flat home-ownership rate. There are more singles and childless couples who are unwilling to commit themselves to a mortgage. Steady home prices and a strong market formerly contributed to mobility, but owners can now find themselves immobilized by deflated but still expensive housing that can take a year or more to sell.

Home ownership is by no means becoming a thing of the past. Dr. Enzer points out that tax incentives strongly encourage home ownership over renting. But it will take a more orderly market than is currently visible to induce many people to buy. Interest rates could drop during the election year, but, he says, ''the picture after that is very frightening,'' since nothing is being done to address the ballooning federal deficit.

Mr. Young says he hopes this issue will attract the attention of lawmakers. The social implications of fewer owners could be significant, he says, noting that 3 owners vote for every 2 renters.

Dr. Enzer disagrees about incentives, warning that they could fuel inflationary housing costs. He predicts that builders will eventually move toward smaller, more moderately priced housing demanded by many people. But there is a need to ease any uncertainty about the future.

Professor Apgar of Harvard says that for those who can afford it, owning is still far less risky than renting, since costs can be fixed with a long-term mortgage.

''There's a lot of certainty associated with it,'' he comments. ''And the underlying sense of being your own boss is a pretty deeply felt attitude.'' He says he would be surprised if, in the long term, renting becomes more prevalent than owning a home.