“Weaker consumer spending data, which accounts for the majority of economic growth, drove mortgage rates to a new record low,” said Sam Khater, Freddie Mac’s chief economist. “While economic growth remains unstable, strong housing demand continues to have a domino effect on many other segments of the economy.”
But, he said the steep rise in home prices is diminishing the benefit of lower mortgage rates.
“For today’s buyers, the current rate combined with higher prices translates into a savings of only $4 per month on a mortgage payment,” he said. “Rising housing markets may run out of affordable homes over the next few months.”