Mortgage applications activity retreated from 8-year highs in the May 12 week, with purchase applications for home mortgages falling a seasonally adjusted 3 percent from the prior week and refinancing dropping 6 percent. Unadjusted, the purchase index decreased 3 percent from the prior week, but the level was still a sharp 9 percent higher than a year ago. The refinance share of mortgage activity resumed its decline and was down to 41.1 percent, the lowest level since September 2008. Mortgage rates were flat again, with the average interest rate on 30-year fixed-rate conforming mortgages ($424,000 or less) remaining at 4.23 percent. The week's decline in purchase applications may just be a temporary slackening in volume which is still an impressive 9 percent higher than a year ago, but the report does little to relieve sudden doubts about what had appeared to be expansion-high strength of the housing market cast by yesterday's disappointing April housing starts report, showing housing starts falling 2.6 percent in the month and single-family home permits and completions both declining by 4.5 percent.