Housing industry members reacting against the Carter administration's proposed ceiling on mortgage interest deductions said this week that it would halt the upward mobility of the middle class - the homeowners who have kept up with inflation by parlaying their houses into more valuable properties with larger tax write-offs.

Treasury Secretary W. Michael Blumenthal and Budget Director Bert Lance recently confirmed that an interest deduction ceiling is one of the options to be sent to the President as part of a tax reform package. It has renewed the controversy that raged over similar proposals made by Carter during the presidential campaign and by congressional Democrats in 1975.

The deduction, which is actually a homeowner's subsidy, saves approximately 18 million American households an average of $250 a year on their taxes. It costs the Treasury about $4.7 billion annually.

More importantly, the subsidy acts during a housing boom as a guffer against inflation. Americans traditionally "buy up," using the appreciation of the equity in their first home as the down payment on a larger, more expensive house. Through successive "buy-ups," each accompanied by the acquisition of heftier mortgages and generally larger interest payments, homeowners gain increasingly substantial tax breaks.

The heady real estate boom of the 1970s has speeded up the appreciation process, boosting the value of many Americans' realty holdings to levels they would not have dreamed possible 10 years ago.

With home values skyrocketing under inflationary and speculative pressures, a proposal to limit or eliminate the deduction could have serious consequences for middle-income homeowners.

When Carter broached the idea during the campaign, presidential rival Sen. Henry Jackson (D-Wash.) called the proposal "incredible." Sen. Birch Bayh (D-ind.) said it would lead to a "taxpayers' rebellion."

The Democratic front-runner quickly clarified his statement by saying that elimination of mortgage interest deductions was meant as a part of a complete tax overhaul. The resulting tax increases, he said, would be offset by other tax reductions so that the tax burden would be more fairly shared.

Ten days ago, Lance attempted to quell the storm over the issue. He said that a ceiling would be designed to reduce deductions for taxpayers owning second or third homes or very luxurious primary residences. The owners of five houses himself, the budget director said the proposal "makes sense to me."

On a separate occasion, Blumenthal remarked that "the average homeowner" would not be hurt by a mortgage interest cutoff.

Although neither official would name the likely cutoff point, other government sources confirmed a ballpark figure of between $125,000 and $150,000.

According to these sources, this figure would apply cumulatively to mortgages on all non-business properties owned by a taxpayer. Thus, at the $125,000 limit, for instance, a person with a $75,000 mortgage on his main residence and a $50,000 mortgage on his country estate, would not be able to take a deduction on the interest on a $30,000 mortgage on his seaside cottage.

The interest on a $125,000 mortgage at 9 per cent amounts to about $11,000 a year. This nearly equals the ceiling passed by the House back in 1975 as part of its tax reform legislation. The bill set a $12,000 limit on tax deductions of interest on all non-business loans. But the measure died when the Senate refused to go along with it.

Treasury and OMB officials stress that no decision has been made on the issue and that it is only one of several options to be presented to President Carter later this summer.

Meanwhile, they point out that if it were adopted, a ceiling would not affect the middle- and lower-income people. If the entire $125,000 represented a mortgage on a single dwelling, that house would probably cost well in excess of $160,000, they said.

According to the National Association of Realtors, 6 per cent of the existing homes purchased nationally last year sold for more than $90,000. And, although no statistics are kept, NAR economist Kenneth Kerin estimates that somewhere between 1 and 2 per cent of the approximately 4 million houses sold in 1976 cost more than $150,000.

In the May issue of Dossier, a Washington society magazine, 84 real estate transactions of more than $100,000 were listed. Fifteen per cent of those topped $160,000. The houses were located in Georgetown, Spring Valley, Alexandria, Chevy Chase, Bethesda, Fairfax, McLean and Arlington.

Bruce Wennerstrom, the president of Previews, Inc., whose average listing is $416,000, said his clients might be inclined to scale down their purchases if there were a ceiling. It would make large estates more difficult to move and could affect their prices, he said.

But Wennerstrom's primary objection is philosophical. "Once the concept is accepted, the dollar ceiling could be lowered each year," he said. Then he added, "It's a poor way to effect social change." Besides, he pointed out, the very rich can always make paper transactions, such as borrowing against their stocks, to compensate for the effect of the ceiling. In the end, it's the aspiring middle classes that will be most affected, he said.

William N. Ellis of the Shannon & Luchs real estate firm here, who personally owns three homes, also disagrees with the ceiling idea on philosophical grounds. "The American way is to buy the future based on today's income. The rich can always afford to pay cash if they get no tax deduction, but the average person can't," he said.

He argued further that since the government was very slow in raising ceilings even in the face of high inflation, a $125,000 ceiling that affected rich people now would affect middleclass home buyers five years hence. Shannon & Luchs' average sale price is about $78,000, he said.

Virginia Chew of Arnold, Bradley, Sargent, Davy & Chew, whose firm specializes in $100,000-and-up homes in Northwest Washington and the nearly suburbs, said, "It won't keep people from buying; the amount is not that great for anybody."

People buying primary homes (in that price range) will just absorb the costs, she said. She added that it might have a greater effect on those buying real estate for investment.