Rep. Michael Barnes broke political tradition in Montgomery County and became the first Democrat to win back-to-back terms in the U.S. House in more than 40 years.

With all 181 precincts reporting, the freshman Democrat rolled to a second-term victory by an 18-point margin over his dogged Republican challenger Newton I. Steers in Maryland's 8th Congressional District.

"I didn't expect anything like this," cried Barnes, to the jubilant crowd of 500 staff members, well-wishers and beaming supporters who thronged his campaign headquarters in Rockville's The Commons at Courthouse Square."This is terrific."

Barnes carried 59 percent of the vote, Steers 41 percent.

Montgomery Democrats, declaring a "landslide," predicted a long congressional career for the 37-year-old winner. "This should be a clear sign that Mike is unbeatable," crowed Democratic Central Committee Chairman Stanton Gildenhorn, as the crowd hollered "two more years, two more years," and "We love Mike."

At Steers headquarters in Bethesda the mood was funeral. The 63-year-old financier and former congressman who lost to Barnes by an eyelash in 1978, called the Democratic winner shortly after 9 p.m. to concede. Standing before his disconsolate supporters a few minutes later, with his wife Gabriele weeping beside him, Steers said, "I feel very badly about losing, but I feel worse about letting you down."

The millionaire Republican, who loaned his campaign nearly $300,000 in his fourth bid for a congressional seat, said his immediate plans were to remove himself to Barthelemy Island in the Caribbean for a vacation with his wife. "It has 22 sandy beaches and no people," Steers said. He said his chances of running again were "very remote," but added that he would be "very proud" to serve in the Reagan administration if asked by the president-elect.

Cheeks of many Steers' campaign workers were glazed with tears as a crowd of about 200 people chanted "We love Newt, we love Newt."

Steers' campaign manager State Sen. Howard Denis met briefly with Steers before the challenger conceded, and congratulated Barnes for a "great victory," saying, "We will absorb this experience as an incentive to do better."

For Steers the bid to recapture the seat he lost by less than 5,000 votes in 1978 began over lunch with Denis and other advisers at the Bethesda Holiday Inn a year and a half ago. "He was so hurt by what happened two years ago," said his campaign manager, Jeanne Miller. "He never resolved what happened."

Steers announced his candidacy in October 1979, determined to redeem a defeat he blamed on his own complacency. After his successful four-way Republican primary against Dels. Constance Morella and Robin Ficker and Philip Buford he vowed, "I'm going to do everything different this time."

Indeed, the campaign for Montgomery's U.S. House seat was marked by the zeal of both candidates, if not the differences in their political philosophies, which were negligible. They debated each other an inhuman 36 times and they spent the highest sums ever in a congressional election in the county: Barnes, more than $265,000, and Steers close to $500,000.

Unlike two years ago, Steers put together a sophisticated campaign organization. But the real difference was in the candidate, who emerged as a dogged, hard-charging challenger in place of the serene incumbent of '78 who scarcely deigned to mention his opponent's name, and who was told, wrongly, by five polls that he would win.

In the last weeks of the campaign Steers' phone canvassing told him he was narrowing the gap separating him from Barnes. The millionaire reached into his portfolio, sold stock, and made large loans to himself, mostly to buy air time. Including loans to his primary campaign, Steers pumped almost $300,000 of his own money into his campaign.

Nearly $200,000 went to media advertising to drive home what became the challenger's principal theme, constituent service and the role of the congressman as local problem solver.

At the start of the campaign both candidates were expecting to divide along party lines over such issues as inflation, defense and the economy with Steers attacking Barnes for marching to the tune of the Carter administration. That strategy collapsed when Barnes spearheaded the drive for the open convention, a flop for supporters of Anybody But Carter, but a success for the freshman congressman who went from political wallflower to national personage in less than a week.

Barnes received considerable support from labor groups. He also benefited from the cooperation of contented Democrats in a county where party unity is sometimes viewed as a disease that afflicts otherwise healthily independent minds.