Demand for purchase loans picked up at the end of March to the highest level of the year, while mortgage rates were mostly unchanged this week, according to surveys by the Mortgage Bankers Association and Freddie Mac.

The MBA’s Weekly Mortgage Applications Survey showed demand for purchase loans grew a seasonally adjusted 6.7 percent during the week ending April 1 when compared to the week before.

Looking back a year, purchase loan demand was down 16.8 percent, relatively low by historical standards at levels last seen in 1997, said Michael Fratantoni, MBA’s Vice President of Research and Economics.

Fratantoni said last week’s increase in purchase loan demand was due to a sharp increase in applications in government loans, likely due to a scheduled increase in FHA insurance premiums. Demand for government-backed loans (by the Federal Housing Administration, U.S. Department of Veterans Affairs and U.S. Department of Agriculture) surged a seasonally adjusted 10.3 percent, to the highest level since May 7, 2010.

With the pool of borrowers who have both the incentive and the ability to qualify for a refinance continuing to shrink, requests for refinancings accounted for 61.2 percent of all mortgage applications, down from 64.3 percent the week before and the lowest share since May 7, 2010.

Freddie Mac’s Primary Mortgage Market Survey showed rates on 30-year fixed-rate mortgages averaging 4.87 percent with an average 0.7 point this week, up slightly from 4.86 percent last week but down from 5.21 percent a year ago. The 30-year fixed-rate mortgage hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11.

Rates on 15-year fixed-rate mortgages averaged 4.1 percent with an average 0.7 point, up from 4.09 last week but down from 4.52 percent a year ago. The 15-year fixed-rate mortgage hit a low in records dating back to 1991 of 3.57 percent in November.

For 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 3.72 percent with an average 0.6 point, up from 3.7 percent last week but down from 4.25 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.

Rates on 1-year Treasury-indexed ARMs averaged 3.22 percent with an average 0.7 point, down from 3.26 percent last week and 4.14 percent a year ago.

Those rates are for borrowers with good credit making 20 percent down payments. Borrowers making smaller down payments or taking out loans too large or risky to be backed by Freddie Mac can expect to pay more.

MBA economists expect rates on 30-year fixed-rate loans will average 5 percent during the first half of this year, rising to an average of 5.3 percent in the third quarter and 5.5 percent in the final three months of 2011.

In a March 15 forecast, MBA economists predicted that rates on 30-year fixed-rate loans will continue a gradual rise next year, climbing to an average of 6.2 percent in the final three months of 2012.