The Mortgage Bankers Association (MBA) reported on Wednesday the mortgage application volume in the U.S. plunged 29.4 percent in the week ended March 20, following an 8.4 percent decline in the previous week. This was the biggest decrease since January 2009.

According to the report, refinance applications tumbled 33.8 percent, while applications to purchase a home decreased 14.6 percent.

Meanwhile, the average fixed 30-year mortgage rate rose to 3.82 percent from 3.74 percent.

"Several factors pushed rates higher, including increased secondary market volatility, lenders grappling with capacity issues and backlogs in their pipelines, and remote work staffing challenges," noted Joel Kan, MBA's associate vice president of economic and industry forecasting. "Potential homebuyers might continue to hold off on buying until there is a slowdown in the spread of the coronavirus and more clarity on the economic outlook," he added.