There are now about 5.9 million borrowers who could see their rates drop by at least 75 basis points by refinancing their mortgages. That is an increase of 2 million in just the past month, according to Black Knight, a mortgage software and analytics company.

Fear over the ongoing trade war with China, and now potentially Mexico, has investors rushing to the relative safety of the bond market, pushing yields lower. Mortgage rates loosely follow the yield of the 10-year Treasury .

The average rate on the popular 30-year fixed has fallen from a recent high of 4.23% on May 21 to 3.94% now, according to Mortgage News Daily.

Mortgage rates are falling unexpectedly and sharply, and that means millions more homeowners can now benefit from refinancing their loans.

That is the largest population of eligible candidates in nearly three years and represents an aggregate of $1.6 billion in potential monthly savings. Per borrower, the savings is about $271 per month.

If the rate were to drop just another quarter point, close to 7 million borrowers could benefit from a refinance, with a collective savings of just over $1.8 billion.

Falling rates are also benefiting buyers, especially as home prices are now cooling. Home prices in March were up 3.8% annually, the first time growth has fallen below its 25-year average of 3.9% since 2012, according to Black Knight.

Affordability is now the best it's been in more than a year, with the monthly payment on the average-priced house down 6% in the past six months (that's with a 20% down payment).

"When we factor income into the equation, we see that it takes 22% of the median income to purchase the average-priced home. That's the lowest payment-to-income ratio in more than a year as well, and far below the long-term average of 25.1%," wrote Ben Graboske, president of Black Knight's data and analytics division.

Homebuyers have been up against a tight supply of lower-priced homes and an overheated market in general. While the price gains have come down significantly, today's younger buyers are still saddled with high levels of debt and are often paying very high rents, making it increasingly difficult to afford a home.

Correction: Aggregate potential monthly savings from the lower mortgage rates are $1.6 billion. An earlier version misstated the figure.

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