Trading activity continues to dwindle as mortgage market participants make their final preparations for the upcoming three-day Christmas Holiday.

U.S. consumer spending was soft in November and a gauge of business investment plans fell for a second month, pointing to some loss of momentum in the economy as the year ends.

The Commerce Department said this morning consumer spending ticked up 0.1 percent after rising by the same margin in October. Economists had expected spending, which accounts for two-thirds of U.S. economic activity, to rise 0.3 percent. While the report suggest some slowing in overall activity, it is unlikely to change perceptions that economic growth will top 3 percent in the current quarter after a 1.8 percent pace in July-September. Against this backdrop the few mortgage investors still at their desks elected to nudge mortgage interest rates a little higher before winding up this holiday shortened trading day.

Looking ahead to next week — the trend trajectory of mortgage interest rates will likely be most strongly influenced by trading action in the stock market. Higher stock prices will tend to drag mortgage interest rates higher while falling stock prices will probably prove supportive of steady to perhaps fractionally lower mortgage interest rates.

For centuries men and women everywhere have kept an appointment with Christmas. Christmas has always been recognized as a time of spiritual thanksgiving and fellowship, feasting, giving and receiving, a time of fun and laughter, and home.

Mortgage Rates as of Friday December 23, 2011 ( purchase transactions )

30 day rate locks, subject to credit score and loan to value edits

FHA

30 year fixed 3.75%

Conventional

30 year fixed rate 3.875%

15 year fixed rate 3.25%

5/1 ARM 2.875%

7/1 ARM 3.125%