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HOUSING INDUSTRY MAY FIND ITSELF ON EASIER STREET IN NEAR FUTURE

If you're betting on which industries are likely to do well in the latter half of the 1990s, you might not be far wrong in ranking the housing industry high on the list.

Home ownership rates have been stuck in the 64 percent range for so many years that forecasters just assume that's as high as they can go. But there are trends that could make owning a home more practical than paying rent.To begin with, rental rates in many cities are going up and mortgage interest rates are coming down.

Beyond that, there is strong sentiment in Congress and the Clinton administration for permitting young couples to delve without penalty into their Individual Retirement Accounts and 401 plans to make a down payment on a first home.

When tax breaks are taken into account, it now is less expensive to own a home than to rent in more than half of the 74 metropolitan areas surveyed this year by the E&Y Kenneth Leventhal Real Estate Group.

The ownership advantage is especially pronounced in cities with good weather and low land prices, such as Bakersfield, Calif.; San Antonio, Texas; Tucson, Ariz.; Tulsa, Okla.; Jacksonville, Fla.; El Paso, Texas; Charleston, S.C., and Miami.

The survey, which compares the cost of a four-bedroom house with a two-bedroom luxury apartment, found that the most expensive markets are San Francisco and Honolulu, where a typical couple easily could spend nearly half their income on housing.

One comparison: The after-tax cost of housing can be as little as 18 percent of median household income in Dallas-Fort Worth, but as much as 50 percent in San Francisco for similar quality.

"What all this really means," says Steve Friedman, who directed the housing survey, "is that people who want to live in high-cost markets like Honolulu are willing to contribute more of their take-home pay and settle for less housing."

Of the 10 most expensive cities, five are in California. They are San Francisco, Oakland and San Jose in the northern part of the state, Los Angeles and San Diego in the south. Other cities where housing tends to be ultra-expensive are New York and Boston.

Rounding out the least-affordable list are Tucson and Sarasota-Bradenton, Fla., where prices are modest but median incomes tend to be low because of the high percentage of retirees.

Increasingly expensive are Seattle and Portland, Ore., where families fleeing California are helping to drive up housing prices.

The least expensive housing markets, comparing costs with income, are Dallas and Houston, followed by Indianapolis, Kansas City, Oklahoma City, Richmond, Louisville, Jacksonville, central New Jersey and St. Louis, the survey found.

Not everyone is convinced that owning is smarter than renting. A new report by the apartment industry argues that:

- The population is aging and older Americans seeking convenience and a convivial atmosphere are a ripe market for apartment living.

- Two-worker couples pressed for time may prefer the services and amenities of apartment living to the responsibility of owning a home.

A lot depends on what happens to tax law in the next few years. If mortgage interest remains tax-deductible and couples are permitted to use retirement savings for down payments, you can be sure that owning a home will be more popular than ever.