ONE OF THE effects of the economic recovery is the revival of the housing industry. Housing starts in June and July of this year were at an annual rate of more than 1.7 million. That's a sharp recovery from the levels of 1.1 million of 1981 and 1982. Housing is an industry very responsive to changes in the economic cycle, and it was hit particularly hard by the high real interest rates that, under Reagan administration policy, were the government's only weapon against inflation. Now, with rising consumer confidence and at least nominally lower interest rates, house and apartment builders are willing to gamble that people are ready to buy again. The recovery in the market has gone on long enough, since the beginning of the year, to suggest that at least the first of those who made that gamble have won.

But the degree to which the housing market has rebounded shouldn't be overstated. Housing starts are still below the average rate for the 1970s, and well below the 2 million-plus levels of 1971-73 and 1977- 78. More than 40 percent of the units being built this year are in multi-unit developments, not in more expensive and more profitable single-family houses. Geographically, nearly 40 percent of the new units are in the Sunbelt states of Texas, Florida and California, though they have only about 20 percent of the nation's population. That shows continuing movement southward--and also that the recovery is concentrated in only a small part of the nation.

The golden days of the 1970s--when the number of housing units grew 29 percent while population grew only 11 percent--aren't likely to return. Housing production was stimulated then by low real interest rates, sometimes below zero; but real interest rates so far in the 1980s have remained high. Nor is it apparent that the nation needs quite so much housing built this decade. Young singles and divorcees accounted for much of the demand for more housing units in the 1970s; but most of the baby boom generation has now reached adulthood, and the number of divorces has been declining since 1979. There is a case to be made that the nation has overspent on new housing, and underspent on maintaining and rehabilitating its existing housing supply. That's not what home builders like to hear, of course, and many people in this almost always unsteady business have suffered in the past few years. Many succumbed to the temptation of supposing that good times would go on forever, and failed to understand that the conditions that produced the housing boom of the 1970s were unique and not likely to be duplicated soon. That is a fact to keep in mind as we celebrate the good effects of the current revival of the housing market.