Applications for loans to buy U.S. residences fell sharply last week -- down nearly 12 percent -- in a possible signal that surging interest rates are curbing Americans' appetite for borrowing.

The Mortgage Bankers Association said Wednesday that for the seven days ending June 28 mortgage applications fell from the previous week by 11.7 percent.

The decline may be tied to mortgage rates that surged to their highest level in two years, a jump that followed Federal Reserve Chairman Ben Bernanke's announcement last month that monetary easing could start ending later this year and end altogether next year.

The refinance index fell further, down 16 percent, while the volume of refinancing applications fell 15 percent last week.