The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. decreased 3.9 percent in the week ended May 29, following a 2.7 percent gain in the previous week.

According to the report, refinance applications dropped 8.6 percent, while applications to purchase a home surged 5.3 percent.

Meanwhile, the average fixed 30-year mortgage rate fell to a record low 3.37 percent from 3.42 percent.

“The pent-up demand from homebuyers returning to the market continues to support a recovery from the weekly declines observed earlier this spring,” noted Joel Kan, an MBA economist. “However, there are still many households affected by the widespread job losses and current economic downturn. High unemployment and low housing supply may restrain a more meaningful rebound in purchase applications in the coming months.”