Rising interest rates are taking a toll on the mortgage business.

The latest data show a dramatic decline in U.S. housing starts in April and a sharp drop in mortgage applications last week. Economists say the market was bound to cool off at least somewhat from 1998's unusually robust level as rates rose. And the 30-year, fixed-rate mortgage rate was at 7.10% last week, up from a 30-year low of 6.49% last October.

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