The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. climbed 7.2 percent in the week ended January 24, following a 1.2 percent drop in the previous week.

According to the report, refinance applications jumped 7.5 percent, while applications to purchase a home surged 5.3 percent.

Meanwhile, the average fixed 30-year mortgage rate dropped to 3.81 percent from 3.87 percent.

"Mortgage applications continued their strong start to the year, as borrowers acted on the drop in mortgage rates last week," noted Joel Kan, an MBA economist. "Rates were driven lower by investors' increased concern about the economic impact from China's coronavirus outbreak, in addition to existing concerns over trade and other geopolitical risks."