The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. increased 0.8 percent in the week ended December 18, following a 1.1 percent advance in the previous week.

According to the report, refinance applications surged 3.8 percent, while applications to purchase a home fell 4.6 percent.

Meanwhile, the average fixed 30-year mortgage rate edged up 2.86 to from record low of 2.85 percent.

“Last week’s increase in refinance applications was driven by FHA and VA activity, while conventional refinances saw a slight decline,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “There are still signs of relative strength in the housing market as 2020 ends. However, housing affordability will be worth monitoring next year,” he added.