A moderate decline in mortgage lending rates has triggered some optimism in the area residential housing market.

Spurred by a lack of demand for conventional mortgages at a record 17 percent and a strong rally in the bond market, some local conventional lenders have lowered their "asking rates" to 16 and 16 1/2 percent.

Meanwhile, discount points paid by sellers for buyers using FHA or VA financing at the current ceiling of 14 percent fell from the range of 8-to-9 down to 1-to-2 within the last few days.

Mortgage market watchers agreed that lack of demand for high-interest mortgage loans and expectations of lower market rates triggered the downward movement.

One are builder is reported to have "bought down" conventional-rate loans for buyers of houses to the 12 7/8 percent level -- paying a fee to the lender to reduce it to that rate.

William Blumenauer, president of Columbia Federal Savings and Loan Association, said that the lower rate offered to buyers by the builder may not cost the difference between 16 percent and 12 7/8 pecent because "rates are expected to moderate more in the next few months."

Mortgage banker Leonard Gatti of Kensington said that an "Incredible drop" in points paid by sellers for FHA-VA loans for buyers was accompanied by a demand for the few packages of Government National Mortgage Association FHA-VA loans available at 14 percent. Also, the reports that the FHA-VA rate ceiling may be lowered from the record-high 14 percent within a few days.

Builders and developers in this area are still offering some below-market, bought-down rates on new homes. Most of them also agree that the housing market could revive quickly if rates generally come down to the 13 percent range. But S&L executive Blumenauer warned: "We're not out of the woods yet."