Despite rising mortgage rates and the decreasing availability of funds, there is still strong demand for housing at any price, delegates to the National Savings and Loan League convention said in Kansas City last week.

Milo Weeren, executive vice president of Heights Savings Association in Houston, said usury rates set by the state legislature -- at 1 1/2 percent over the Treasury bill rates -- have virtually pushed Texas thrifts out of the lending business. Because the loans are not up to national averages, they sell poorly on the secondary market, he said.

Savings deposits have fallen off 75 percent, and Texas savings and loans are resorting to pass-through securities offerings for funds, he added.No associations are in trouble yet, but the number of mergers is up, Weeren said. He also predicted that housing starts will fall by 50 percent in Texas before the recession is over.

A very different picture was painted of Florida. A. Louis Brown, Jr., executive vice president of Financial Federal Savings and Loan Association of Miami, said that savings deposits have held up well, although they leveled off last month. The savings flow can be expected to continue during the coming winter because of the large number or retired people in the area, he said.

As a consequence, Florida thrifts have a great deal of liquidity, he said. The rate for prime residential loans there was 12 1/2 percent as of last week and demand has held up "remarkably well," Brown added. He warned, however, that housing starts could fall off drastically before the recession's end.

In Los Angeles, the situation is still relatively good, although loan demand trailed off a bit last month, according to William S. Mortensen, president of First Federal Savings and Loan Association of Sant Monica, Calif. Last week the prime rate for residential loans was 12 1/2 percent, and rose to 15 1/2 percent for buyers making lower down payments. This week Gibraltar Savings and Loan in Los Angeles raised its best rate to 14 percent for $75,000 loans and was charging up to 16 percent for loans of more than $150,000.

Right now, Mortensen added, his association is just breaking even. He said he anticipates that profits for the year will be down 15 to 20 percent for all California S & Ls, except the large, state-chartered institutions that have made a number of variable-rate mortgage loans. First Federal recently issued a $15 million mortgage-backed bond issue, and most California S&Ls continue to have reasonably good earnings.

Edward Alexander of Majestic Savings and Loan Association in Denver said his best rate is now 13 percent, with riskier loans ranging up to 14 1/2 percent. Moreover the maximum on loans is restricted to $75,000, or what can be sold in the secondary market, he said.

Richard S. Lawton, chairman of Washington-Lee Savings and Loan Association in McLean, remarked, "This is the first time the Washington area has caught up with California rates." His association is only making loans with high enough interest rates (a minimum of 12 1/2 percent) and low enough value ($75,000) to be sold on the secondary market. "We'll be lucky to break even this quarter," he said.

S&L League president Harold W. Greenwood, who also heads the Medwest Savings and Loan Association of Minneapolis, called the slowdown a "healthy sign" after the raging price increases of the past few years.

"I think you can already see pockets all over the country where housing prices are coming down by $5,000 or $6,000 from what they were last year," he told delegates. "The real estate agents have a lot of unsold houses on their books, whether they want to admit it or not," he said.