Despite the failure of Operation Breakthrough, a federal attempt to reduce housing costs through modular construction in the late 1960s, factory-built housing is playing an increasingly larger role in American home construction.

Orchestrated by Housing and Urban Development Secretary George Romney, Operation Breakthrough was a well-intentioned but untimely effort to increase housing production through the use of house and apartment components that were manufactured in factories and then hauled to sites and assembled. It was a costly experiment that proved unworkable for a number of reasons. Buyers didn't particularly like the kinds of houses that were being built under the program, for one thing.

Since Operation Breakthrough, which sought to add a federal ingredient to a movement already under way in housing construction, builders have been using more factory-built components than ever to assemble single-family houses.

While stick-by-stick construction is still the most popular form of home building, large-volume builders increasingly are manufacturing their won panels and components - including trusses, pre-hung dorrs, kitchen cabinets and wall panels - in their own plants. Smaller builders are buying similar panels and compoenents from firms that produce standard elements in small factories near most major cities.

One of the prime criticism of Operation Breakthrough was its premise that there's a national housing market. Most building industry professionals contend that housing is - and always will be - a matte of local markets. For instance, in tiny Greenwood, Del., known to many Washingtonians as a pass-through on one of the alternate routes to the Delaware-Maryland beaches, six-year-old Nanticoke Home, Inc. expects to produce 500 manufactured houses this year, primarily for erection along the Eastern Shore area.

A typical, One-floor Nanticoke house is built in two sections that are zipped together on a site. A 28-by-48-foot structure costs about $29,000.

Nanticoke is the firm of John and Peggy Mervine, who are being helped this summer by their three sons - along with 160 other employees. The Mervines sell most of their houses to individual lot owners and will complete houses for customers who put down 10 per cent in advance. The firm is currently producting 215 houses for customers. There currently is a waiting period of three or four months for completing a house, although in a pinch, a house could be delivered in 30 days, Mrs. Mervine said.

Nanticoke house prices have increased only by $1,000 in the past three years, she added.

Because of shipping requirements, all of the Nanticoke modules are built to be 14 feet wide but this can be doubled on the site. Lengths range from 40 to 64 feet.

Closer to home, in the Watts Branch Estates area of Potomac, a four-bedroom, three-bath house manufactured by Acorn Structures of Concord, Mass., is being finished for Dr. Ralph Ryback. The 3,000-square-foot contempory dwelling, pre-cut and pre-engineered, is being erected by CKC Associates of Gaithersburg.

The Ryback house will have a complete solar energy package installation, with solar collectors mounted on a detached garage. Energy will be stored underground in a 2,000-gallon water tank.

Priced about $110,000, the house was sold by the Acorn dealer in Annapolis and Ryback hired CKC to do the construction on his site.

CKC, a partnership of James and Steve Chiavelli and Charles Kerr, specializes in pre-cut houses and has assembled components producted by the Stanmar, Kingsberry and Scholz house manufacturers.

Nanticoke and Acorn are both members of the National Association of Home Manufacturers, a relatively small trade association based here. Donald L. Gilchrist, the association based here. Donald L. Gilchrist, the association's president, says the member products now cover the spectrum of residential housing. Some of the manufacturers are now exporting to the Middle East, he added.

Gilchrist has been a leader in the move to establish basic federal standards for energy conservation in new houses. He insists that they shoudl be included in the minimum property standards of HUD/FHA, which he said would permit innovation while at the same time holding down costs of production.

Recently, HUD announced the modular housing would continue to be exempt from federal mobile home standards - until next June 30. The department said it was extending the exemption to allow more time to develop legislation affecting modular bousing units. Under the National Mobile Home Construction and Safety Standards Act of 1974, mobile homes are partly defined as structures built on a permanent chassis. While modular homes meet the definition, HUD said, they are built to different standards.

Mobile constitute a segmenf of the housing market that is said to account for one out of 10 houses priced under $20,000. Some 10 million Americans live in this kind of structure. The Manufactured Housing Institute, the Crystal City-based organization of this trade group, has a new president, Walter Benning, who is anxious to create a new public image of the type of housing he refers to as "two-sentional and double-wide."

Mobile home producers saw their production slump sharply in 1975 and 1976, but it is moving up again and may hit 275,000 units this year. The basic product is still the "single-wide," factory built dwelling designed to be placed on a pad or permanent undercarriage in a mobile home park, usually in a rural area.

But these formerly mobile homes (fewer than 2 per cent are ever moved after being placed) are becoming larger and more luxurious. Sections are 12 or 14 feet wide and put together on the site into dwellings that are 56 to 70 feet long.

The basic aim of this industry is to make mobile homes look more like conventional houses by getting rid of flat roofs and the flat front look. The mobiles have to conform to HUD inspections set forth in the Housing Act of 1974, which Benning described a tough.

The National Association of Home Manufacturers has been existing in harmony with the far larger National Association of Home Builders, which embraces most of the NAHM membership. BUt there is some animosity between NAHB-NAHM and the MHI (formerly Mobile Home Manufacturers Associations). An NAHB vice president said simply: "There should be one set of minimum property standards: "NAHB doesn't recognise our housing in statistics but there are NAHB builder-developers who buy and use our products in their mobile home parks."