Purchase applications for home mortgages fell a seasonally adjusted 1 percent in the May 19 week, but refinancing applications rose 11 percent from the previous week to the highest level since March. The drop in purchase applications follows a 3 percent decrease in the prior week and takes the year-on-year purchase index gain down 6 percentage points to 3 percent. Lower rates during the week gave a big boost to refinancing, and the refinancing share of mortgage activity rose to 1.8 percentage points to 43.9 percent. The average interest rate on 30-year fixed-rate conforming mortgages ($424,000 or less) fell to the lowest level since November 2016, down 6 basis points from the prior week to 4.17 percent. The second weekly decline in purchase applications despite more attractive mortgage rates casts further doubts on the strength of the housing market, which opened the year strongly but may be slowing during the Spring selling season, as seen in the significant weakness shown yesterday's new home sales report for April and housing starts reported last week.