Mortgage purchase applications took a nose dive last week, falling 6.7 percent, as mortgage rates jumped up sharply, according to data released Wednesday morning by the Mortgage Bankers Association. The MBA's composite index of application activity, which includes both purchase and refinances, fell 6.2 percent to 489.6 for the week ended July 18, the trade group said in a press statement. Overall applications were 19.6 percent below year-ago levels. The MBA application index is calibrated to March 16, 1990; a reading of 489.6 means that application activity was roughly 4.6 times greater than when the index was first established. Application activity has remained somewhat cloudy throughout the past month from a prepayment perspective, however, with a well-known index used by Wall Street researchers deviating pretty sharply from the MBA's results as of late. This past week marked the third time in four weeks that an index maintained by Mortgage Maxx LLC has headed in the opposite direction to the MBA's results. The Max index, released Monday, found that applications actually rose 3.1 percent for the week ended July 18, contrasting with the sharp declines recorded by the MBA. This direction difference is particularly vexing, given that the Max index corrects for multiple application activity (meaning that it's often easier to explain why the MBA index is rising while the Max index is not, rather than vice versa). "It's possible that higher mortgages rates discouraged overall mortgage shopping activity," said one ABS analyst interviewed by HW, "but from a prepayment perspective, the picture is certainly a bit muddy right now." Part of the reason for that may be because mortgage rates have been increasing pretty dramatically in the back half of last week and into this week, based on anecdotal evidence from mortgage brokers that spoke with HW, as well as general data on rate pricing activity provided by mortgage pricing research service The Mortgage Market Guide. The New York Times noted in a story Wednesday that the average rate for 30-year fixed-rate mortgages jumped nearly 30 basis points from Friday to Monday, to 6.71 percent by Tuesday. For jumbos, that rate was at 7.8 percent, the highest since December 2000. For more information, visit http://www.mortgagebankers.org.