Mortgage activity slowed notably in the December 15 week, with purchase applications for home mortgages falling by a seasonally adjusted 6 percent from the prior week, putting the unadjusted purchase index only 1 percent above the year ago level, 9 percentage points less than the prior week's year-on-year gain. The weekly drop in refinancing applications was less pronounced at minus 3 percent, raising the refinancing share of mortgage activity by 1.5 percentage points to 53.9 percent, the highest level since December 2016. The average interest rate on 30-year fixed-rate conforming mortgages ($424,100 or less) declined 4 basis points from the prior week to 4.16 percent. The second weekly decline in purchase applications following 6 weeks of consecutive gains came despite cheaper financing, perhaps indicating that the upsurge in the housing market seen in most housing data during the fourth quarter has lost momentum at year end. Further insight into the condition of the housing market can be gained later this morning with the release of the existing home sales report for November, expected to show significant strength.