Fred Imbert, Sam Meredith
The benchmark 10-year note yield slipped to 3.054 percent while the short-term two-year yield dipped to 2.775 percent. Bond yields move inversely to prices.
Homebuilder sentiment dropped to its lowest level since August 2016 this month amid rising mortgage rates and unrelenting price growth.
"Builder sentiment is now joining the reality that housing has been slowing all year after hanging in pretty well this year," said Peter Boockvar, chief investment officer at Bleakley Advisory Group, in a note.
"As the most interest rate sensitive area of the economy outside of auto's, a moderation in housing was to be expected but what we're seeing is just how sensitive the economy is to modest changes in interest rates that are historically low," he said.
The rise in bond prices also comes as U.S. stocks sold off, adding to their steep losses from last week.
Vice President Mike Pence said in a speech Sunday that there would be no end to U.S. charges on $250 billion worth of Chinese goods unless Beijing changed its ways.
Pence's comments come after President Donald Trump said Friday that he may not impose further tariffs on Chinese goods, after the Asian giant reportedly sent a list of measures it could be prepared to take to resolve the ongoing trade dispute.