The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. surged 5.0 percent in the week ended January 31, following a 7.2 percent surge in the previous week.

According to the report, refinance applications jumped 15.3 percent, while applications to purchase a home fell 9.5 percent.

Meanwhile, the average fixed 30-year mortgage rate dropped to 3.71 percent from 3.81 percent. That was the lowest level since October 2016.

"The 10-year Treasury yield fell around 20 basis points over the course of last week, driven mainly by growing concerns over a likely slowdown in Chinese economic growth from the spread of the coronavirus. This drove mortgage rates lower, with the 30-year fixed rate decreasing for the fifth time in six weeks," noted Joel Kan, MBA's associate vice president of economic and industry forecasting.