The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. surged 15.1 percent in the week ended February 28, following a 1.5 percent increase in the previous week. This was the biggest advance since the week ended January 10 this year.

According to the report, refinance applications climbed 26.0 percent, while applications to purchase a home fell 2.7 percent.

Meanwhile, the average fixed 30-year mortgage rate dropped to 3.57 percent from 3.73 percent.

"The 30-year fixed-rate mortgage dropped to its lowest level in more than seven years last week, amidst increasing concerns regarding the economic impact from the spread of the coronavirus, as well as the tremendous financial market volatility," said Mike Fratantoni, MBA's senior vice president and chief economist. "Given the further drop in Treasury rates this week, we expect refinance activity will increase even more until fears subside and rates stabilize."