Long-term interest rates continue to hover at their lowest point of the year, but the attention of most Americans was likely directed toward preparing for and celebrating the holidays last week, according to the latest Market Composite Index, released by the Mortgage Bankers Association (MBA) this morning.

The Index, which measures and compares mortgage loan application volume from week to week, showed that overall mortgage activity--both purchases and refinances--decreased 14.2 percent for the week ending December 22, as compared to the week ending December 15.

"With consumers' focus squarely on the impending holiday season last week, it is no surprise that mortgage applications declined," says Bob Walters, chief economist of Loans. "The current run of low long-term rates and an improving jobs picture should lead to strengthened refinance and purchase activity in the New Year, however."

Although refinance activity was down 18.5 percent and the Purchase Index fell 10.6 percent, as compared to the previous week, overall mortgage activity was up nearly 17 percent from the same week last year.