The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. rose 1.5 percent in the week ended May 31, following a 3.3 percent drop in the previous week.

According to the report, the refinance applications surged 6.4 percent, while applications to purchase a home declined 2.4 percent.

Meanwhile, the average fixed 30-year mortgage rate decreased to 4.23 percent from 4.33 percent.

“Mortgage rates dropped to their lowest level since the first week of 2018, driven by increasing concerns regarding the ongoing trade tensions with China and Mexico,” said Mike Fratantoni, MBA senior vice president and chief economist. “Some borrowers, particularly those with larger loans, jumped on the opportunity to refinance, bringing the index and average refinance loan size to their highest levels since early April. Additionally, refinances for FHA and VA loans jumped by 11 percent.”