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The U.S. trade war is causing big swings in global bond markets, which in turn may be leading some borrowers to hold off on locking in new home loans or refinancing, a new report shows.

The almost-daily volleys in President Donald Trump's trade war with China have perplexed investors with hard-to-reconcile economic data and conflicting signals from the stock market and U.S. Treasury bonds.

Those trade tensions, apparently, are now giving pause to U.S. homeowners as they weigh whether to refinance higher-cost mortgages even with fixed interest rates on 30-year loans at their lowest in almost three years. 

The Mortgage Bankers Association said Wednesday in a statement that its index of U.S. mortgage-refinancing activity slipped by 7% last week, though it was still more than double the level at this time last year.

Mortgage rates have tumbled in recent months along with yields on 10-year U.S. Treasury bonds, which many banks use as a benchmark when pricing home loans. The drop has been fueled by Federal Reserve interest-rate cuts, but it's also a function of global jitters that have pushed many investors to seek safety in the triple-A-rated U.S. government securities, pushing down yields. 

The average fixed interest rate for a 30-year fixed mortgage rate declined last week to 3.87% from 3.94%, the lowest since November 2016. 

"Ongoing trade tensions between the U.S. and China led to volatile yet declining Treasury rates last week," Joel Kan, the association's associate vice president of economic and industry forecasting, said in the statement. "Consumers continue to act on these lower rates, but the volatility in the market is likely leading some borrowers to pause refinancing and buying decisions."

Mortgages for home purchases rose by 1% from the prior week, according to the association.

Compared with the same period of 2018, purchase loans rose just 5%, potentially reflecting what economists describe as a tight housing market, with an unusually low number of new and existing homes currently for sale.