Interest rates on home mortgages have dropped by nearly three-quarters of a percentage point over the past two weeks, to about 10 percent for most 30-year, fixed-rate loans, and housing industry economists predict that the rates will stay put for the next several months.

In addition, lenders were charging 3 to 3 1/2 points on loans this week, about the same as they were asking a few weeks ago. A point equals 1 percent of the mortgage amount, and adds about one-eighth of a percentage point to the overall interest rate.

Home buyers and sellers were stunned by a 2 percentage point jump in April, which slowed sales and pushed some first-time buyers out of the market entirely. Several economists predicted at the time that rates would drop again soon. However, most do not believe interest rate levels will return to the lows of 8 1/2 and 9 percent earlier this year, the lowest in more than nine years.

Loans insured by the Veterans Administration and the Federal Housing Administration carried rates of 10 percent last week, but with fewer points than those charged for conventional mortgages. The number of points charged dropped from an average of 2.89 three weeks ago to 1.78 last week, according to a weekly interest rate report issued by the FHA.

The FHA report said some leaders believe that interest rates on FHA-insured mortgages, which float with the market, could drop to 9.5 percent soon barring any surprises in the economy or in the stability of the dollar. The FHA monitors 30 mortgage lenders across the country each week.

The rate retreat from levels of 10 1/2 to 11 percent at the end of May is not a surprise, in that the April increase was touched off by economic indicators that turned out not to be as serious as first believed, said Thomas Lawler, vice president and senior economist at the Federal National Mortgage Association, or Fannie Mae. "It looks like the market panicked," he said.

Within the last few weeks an improved foreign trade balance has helped stabilize the value of the dollar and commodity prices have declined, reducing fears of rising inflation.

"We still think the low point in interest rates came in the first quarter of the year and I can't think of a reason to change" that view, Lawler said. "I don't think the 30-year fixed-rate {loan} will go below 10 percent" this year, he said.

Others said they believe the rate will rise again. The National Association of Home Builders expects rates on 30-year, fixed-rate loans to hit 11 percent by the end of the year, according to David F. Seiders, the association's chief economist. He said he based the prediction on "a presumption that the economy will gain more strength" and "inflationary pressures" will grow.

The major part of the current interest rate decline has come in the past week, so lenders are not seeing an increase in loan applications yet, said Frank Nothaft, senior economist for the Federal Home Loan Mortgage Corp., known as Freddie Mac. If the rate stays down for a couple of weeks, more purchasers will be looking for loans, he added.

Fannie Mae and Freddie Mac are major secondary market institutions, which buy loans from lenders and sell securities backed by them as a way to provide more money for home mortgages.

Washington area developers and real estate agents reported a decline in sales and in the number of potential buyers visiting new subdivisions as rates rose during May, and so far the number of shoppers has not picked up again.

"In the last two or three weeks traffic has been down everywhere," said Jon Bray, vice president of Weaver Bros. Inc. He said he believes one reason may be that the interest rates have not been down long enough.

As rates rose this spring, so did home buyers' interest in adjustable-rate mortgages, Bray said. Most borrowers prefer fixed-rate loans, however, and he predicted that as rates go down the demand for ARMs also will drop.

Interest on adjustable-rate loans did not rise as dramatically as did the rates on conventional loans. In the Washington area the initial rates on one-year ARMs -- those on which the interest is adjusted annually -- ranged from 7 1/2 to 8 1/2 percent last week, according to the weekly Peeke Report. Points varied from 1 1/2 to 3 1/2, the report said.