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 ( BAC) had a round of layoffs because of its weak refinance business and Wells Fargo ( WFC) 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.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.