Home mortgage rates have been moving down toward the level that a veteran Washington savings and loan executive says will begin to attract buyers again.

While a handful of thrift institutions and banks posted mortgage rates of about 13 percent last week, Columbia Federal S&L President T. William Blumenauer Jr. thinks buyers will be turned on only when the rate goes a notch lower to 12 7/8 percent less.

Blumenauer, who completed 42 years at Columbia Federal last January, has experienced many times the current thrift institution problem of more withdrawals than new savings, which is termed disintermediation. When interest rates on other investments surpass those available on savings accounts, there is an outflow of money and the S&L have less money to lend (thus higher mortgage rates for what is available) as well as lower operating profits or even losses.

In a recent interview, Blumenauer said he is more optimistic than he had been in mid-March about the short-term outlook for his industry. "April savings were better than anticipated, things are looking better," he added.

At the same time, Bill Blumenauer noted that home buyers of the future will face a much different interest rate environment than buyers in previous years.Whereas in previous years interest rates on savings accounts were kept low, small savers now have revolted successfully and they will earn more for their future savings. This means that interest rates on home mortgages also will be higher. In effect, a subsidy by savers to home buyers has been ended. wOr, to quote Blumenauer: "Over the years borrowers have done well but not the savers. We will either pay market rates to attract money or we won't have it to lend."

The Columbia Federal chief emphasized, however, that "home buyers can't pay 17 percent," the rate charged by some S&LS before the recent decline in interest rates. He also warned against government action to provide short-term relief in the depressed housing market. Money borrowed now to subsidize lower mortgage rates only would add "upward pressure on rates again, and even though tight-money policies are hard to swallow, they are necessary so that the problems created by high inflation don't recur in worse form later on,"" he added.

Blumenauer, a native of Washington and 1935 graduate of the old Central High School, said his industry "can ride out" the current credit crunch and he predicted that the S&LS will be stronger in the end.

Blumenauer also expects wide use of variable rate mortgages in place of the fixed-rate mortgages of past years. "It is not economically feasible to keep fixed-rate mortgages, when rates go up and down like in recent years," he stated.

When Blumenauer joined Columbia in 1938 it had total assets of $4.5 million. When he became president 12 years ago assets were 150 million and at the end of 1979, the area's third-largest S&L had assets of more than $554 million.

Blumenauer predicted more S&L mergers to create larger institutions. Columbia, itself the result of mergers since 1957 with Mutual, Distict Building & Loan and Hamilton Federal, has nine offices today and is looking at sites in Northeast and Southwest D.C. for possible new branches.

the Columbia Federal chief is past president of the Metropolitan Washington Savings and Loan League, a director and treasurer of the YMCA and director of Goodwill Industries. He has been cited the Urban Reinvestment Task Force for encouraging the work of Neighborhood Housing Services and is first chairman of the Metropolitan Washington Home Loan Review Committee.