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[video] Quick Take: Mortgage Applications Plunge

Tickers in this article: BAC WFC
NEW YORK (TheStreet) -- Mortgage rates are rising after being historically low, and this has continued to weigh on mortgage applications, TheStreet's Shanthi Bharatwaj told Brittany Umar.

Mortgage rates hit the highest levels of the year and, as most would expect, have negatively affected applications. Bharatwaj said the quick plunge shows the unwillingness of buyers to shop for homes and to refinance -- a business that is much more rate-sensitive.

Another problem, she added: There aren't enough homes for sale either.

Recently, Bank of America had a round of layoffs because of its weak refinance business and Wells Fargo announced it plans to do 30% fewer home loans this quarter, said Bharatwaj.

However, there is a silver lining. Bharatwaj said higher rates make big banks more profitable with their lending business, which is typically much bigger and broader than its mortgage business.

Overall, that should have a positive effect on the big banks over the long term, she concluded.

-- Written by Bret Kenwell in Petoskey, Mich.