Higher interest rates are having a quick effect on mortgage loan applications. The index of total mortgage applications fell 7.4% last week to 681.9 (+30% y/y), down for the sixth consecutive week. Applications to refinance fell 9.3% yet still were up by nearly one-half from one year ago. Home purchase applications fell 1.0% (-3.7% y/y), the first decline in four weeks. Applications remained 60% lower than the peak in late-2007. Fixed interest rate loans fell sharply w/w with higher rates.

The effective rate on fixed-interest, conventional 15-year mortgages jumped to 3.57% from 3.44% during the week prior. The effective rate on a 30-year fixed rate loan similarly rose to 4.32%. On a 30-year Jumbo the effective rate was 4.60%. Though it's narrowed slightly of late, the spread between 15- and 30-year loan rates continued wide by historical standards. The effective interest rate on an adjustable 5-year mortgage increased to 3.06%, its highest in a month.

The Mortgage Bankers Association surveys between 20 to 35 of the top lenders in the U.S. housing industry to derive its refinance, purchase and market indexes. The weekly survey covers roughly 50% of all U.S. residential mortgage applications processed each week by mortgage banks, commercial banks and thrifts. The figures for weekly mortgage applications are available in Haver's SURVEYW database.

The European Economic and Financial Situation is this morning's speech by Fed Chairman Ben S. Bernanke and it can be found here.