Mortgage applications increased significantly in the United States as mortgage rates dropped to a seven-year low, Mortgage Bankers Association (MBA) said in a report on Wednesday.

For the week ending Friday, MBA's market composite index, a measure of mortgage loan application volume, jumped 15.1 percent from the previous week.

"The 30-year fixed rate mortgage dropped to its lowest level in more than seven years last week, amidst increasing concerns regarding the economic impact from the spread of the coronavirus, as well as the tremendous financial market volatility," said Mike Fratantoni, senior vice president and chief economist at MBA.

Meanwhile, the refinance index, which measures the activity of replacing higher rate mortgages with lower rate ones, increased 26 percent from the previous week, according to MBA.

"Refinance demand jumped as a result, with conventional refinance applications increasing more than 30 percent," said Fratantoni.

MBA's purchase index before seasonal adjustment increased 11 percent from the previous week. After removing the influences of predictable seasonal patterns, the seasonally adjusted purchase index decreased 3 percent from the previous week, according to MBA.

"Given the further drop in Treasury rates this week, we expect refinance activity will increase even more until fears subside and rates stabilize," Fratantoni said.