Mortgage rates dropped for the sixth straight week, but housing activity remained muted going into the holidays. The rate for the average 30-year fixed mortgage slipped to 6.27% from 6.31% the week prior, according to Freddie Mac. Rates have fallen more than three-quarters of a point since mid-November after the Federal Reserve indicated that it would slow its interest-rate hikes amid cooling inflation. Still, rates remain 3 percentage points higher than they were at the start of the year , leaving many first-time buyers on the sidelines and sellers — who haven’t pulled their listings — more willing to negotiate. “Heading into the holidays, mortgage rates continued to move down,” said Sam Khater, Freddie Mac’s chief economist said in a press release. “Rates have declined significantly over the past six weeks, which is helpful for potential homebuyers, but new data indicates homeowners are hesitant to list their homes. Many of those homeowners are carefully weighing their options as more than two-thirds of current homeowners have a fixed mortgage rate of below 4%. for the week ending Dec. 16, but purchase activity declined 3% compared with a week prior. Overall, purchase applications were down 36% from a year ago, the MBA noted, as most price-struck buyers have opted to wait longer. “A slowdown in buyer activity is typical for this time of the year,” Scott Sheldon, branch manager of New American Funding, told Yahoo Money, adding that buyers prefer to hold out until after the holidays are over to return to their purchase plans. Still, the housing slowdown started long before the holiday season began as many buyers have been spooked by higher mortgages payments and interest rates, with “first-time buyers most affected,” Sheldon said.According to data from the MBA, the national median mortgage payment was $1,977 in November. While that’s down from $2,012 in October, the average payment is still 42.9%. higher — or $594 more per month — than at the start of the year.Story continues “As a buyer, seeing rates increase from an average of 3% to a 6.50% loan, that’s a tall order,” Sheldon said. people are facing right now and the only w ay they can make that up is negotiating a purchase price.” (Photo by: Michael Siluk/UCG/Universal Images Group via Getty Images) each week on average during the 12 weeks leading up to Nov. 20, Redfin data showed, compared with 1.6% a year prior. The share of de-listings improved to 1.9% in the 12 weeks ending Nov. 27. Sellers who remain in the market, though, are cutting prices more often. The share of homes with a price reduction increased to 19.6% in November, up from 9.2% a year earlier, according to Realtor.com. Some 37% of builders reduced their prices last month, up from 26% in September, according to the National Association of Homebuilders, with an average price cut of 6%. Overall, the national median list price fell to $416,000 in November, according to Realtor.com, down from $425,000 in October and from June’s record high of $449,000. According to Mike Fratantoni, MBA’s chief economist and senior vice president of research and industry technology, it will take some time before home prices normalize again.” continue to be roughly flat at the national level and that trend will continue through 2024,” Fratantoni told Yahoo Money. “Home prices won’t be running away from buyers the way they have been for the last couple of years and rates will be coming down – but it will be a weaker economy, so that’s going to be a challenge for some buyers.” is a personal finance reporter at Yahoo Money. Follow her on Twitter @__gabriellacruz.Click here for the latest economic news and economic indicators to help you in your investing decisionsRead the latest financial and business news from Yahoo FinanceDownload the Yahoo Finance app for Apple or AndroidFollow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube.