What's happening to home prices can be a touchy subject for people who think that the natural order of things call for more appreciation every month.

But the fact is that values generally appear to have flattened out.

"In our market area, we've seen stable values," said Robert Holzer, senior vice president of North West Federal Savings of Chicago.

Prices nationally "are really not doing much of anything," said Kenneth Kerin, director of economics and research for the National Association of Realtors. "I think they're about 8 percent above what they were a year ago, but most of that increase came in the late summer of last year when interest rates went down to about 11 1/2 percent. After that sudden spurt of appreciation we haven't really had anything happen."

Those who tout housing as the best investment since gold may be headed for the nearest open window. But before anyone leaps, a questions should be asked: Isn't this what fighting inflation is all about?

"I think there's a great reeducation that has to take place," said Virgil Owings, president of United Development Co., one of the Chicago area's biggest home building firms. "What it really is that you can't really get stable food prices and rising home prices [at the same time]. You can't selectively control inflation."

Market research by United Development suggests that buyers "absolutely expect" to cash in on rising values, presumably like the skyrocketing increases witnessed in the late '70s, Owings said.

But for the foreseeable future, Owings looks for a situation similar to the one in the days when homeownwership bore no resemblance to playing the stock market.

"If you came out of a house and made a few bucks on it, it was fine," he said.

Holzer said: "I think we'll see the borrower return to trying to pay the house off as soon as possible and away from leveraging and buying as an investment vehicle. When I started out in this business people would buy a home and pay for in 10 to 15 years. Everyone prepaid. It was a fact of life and I think it's going to return."

It's obvious that what has prevented prices from continuing to zoom has been high mortgage rates. The higher the rate goes, the less the buyer is able to pay for the house.

Consider the purchaser who can afford about $500 in monthly mortgage payments. At 10 percent interest, he could swing a mortgage of about $57,000. At 15 percent, it would be about $40,000. And at 17 percent, the interest rate that some lenders are charging now, the mortgage amount would be only $35,000.

"I don't see interest rates coming down below 14 percent any time this year," Kerin said. "If they got to 13 1/2, it would be sometime next year."

Owings doesn't expect rates much below 12 or 13 percent for the next two or three years.