Trade uncertainty is given as the primary reason for the continuous drop in rates.

More rate cuts are on the horizon. At least that's what Fannie Mae's Economic and Strategic Research Group has projected in its latest report on economic and housing trends. The report projected two more rate cuts by the Fed—one in September and one in December. It also indicated that a stronger than expected first half had pushed the GDP growth forecast for 2019 to 2.2%, despite "escalating trade conflict and the associated risks of financial market volatility, labor market weakness, and loss of consumer resiliency." Despite the strong signs of consumer demand, the report revealed that "residential fixed investment dragged for the sixth consecutive quarter." Business investment also "turned negative in the face of increasing trade and geopolitical uncertainty." "Though the current expansion recently became the longest on record, reverberating trade tensions and general economic uncertainty continue to weigh on growth,” said Doug Duncan, SVP and Chief Economist at Fannie Mae. “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.” While the demand for housing remains strong, the ESR Group found that limited inventory, especially for affordable housing, continued to remain a challenge for homebuyers. This, despite Fannie Mae's latest Home Purchase Sentiment Index suggesting strong homebuyer interest after recording a new survey high in July.

Source: MReport