President Donald Trump's trade war with China is hurting U.S. manufacturers and casting a pall over the stock market, but there's a silver lining for households: mortgage rates at their lowest in almost three years, affording an opportunity to refinance loans now for a monthly savings. 

Trump's trade war has sparked such uncertainty among business executives that investors have flocked to U.S. government bonds as a safe asset, pushing down 10-year Treasury yields that banks use as a benchmark when pricing many 30-year fixed-rate mortgages. At the same time, the Federal Reserve has cut official interest rates in short-term money markets to stimulate the economy, largely because of anxieties over the trade war and ensuing global weakness.

As a result, the rate on the average 30-year fixed-rate mortgage fell to 3.77% in July, the lowest since November 2016, according to Freddie Mac, the U.S. government-backed housing-finance agency. The rate averaged 4.27% in 2017 and 2018.

With rates now well below that level, an estimated 35% of mortgages could be refinanced for "significant cost savings," said Doug Duncan, chief economist at Fannie Mae, another big mortgage-finance agency, Thursday in a press release.

"The persistent trade tensions between the U.S. and China threaten to further reduce business investment, disrupt equity markets, degrade household wealth, and diminish consumer spending, the country's primary economic engine of late," according to Duncan.

The Federal Reserve is likely to cut interest rates twice more this year, by a combined 0.5 a percentage point, "to help shield financial markets, buoy consumers, and perhaps nudge inflation slightly higher," Duncan said.

The dynamic could help to hold mortgage rates down or even drive them lower. 

"Mortgage rates are approaching the lowest level in recent decades, and as they have moved lower, more and more homeowners are finding incentive to refinance," he said. 

A refinancing boom could help to support the economy by leaving households with extra cash to spend each month.

The development also could provide a fee windfall to big mortgage underwriters like JPMorgan Chase (JPM) - Get Report , Bank of America (BAC) - Get Report and Wells Fargo (WFC) - Get Report  .

For the lending industry, a wave of refinancings could help offset weakness in demand for loans for new-home purchases, according to Duncan.

There's currently a limited inventory of new homes for sale, which has kept upward pressure on prices and prevented some buyers from entering purchase contracts.

"While existing homeowners may be able to enjoy the benefits of lower interest rates, many would-be homeowners, and the purchase mortgage market generally, remain unable to capitalize on the favorable rate environment due to the chronically limited supply of homes available for sale," Duncan said.

As often is the case, it's better to be a have than a have-not.  

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