The Obama Administration announced its Making Home Affordable plan last week which it hopes will help keep people in their homes, and sustain property values by reducing foreclosures. The plan has three initiatives -- the refinance initiative, loan modification initiative and low mortgage rate initiative. The first two initiatives were expanded on in last week's announcement -- I'm currently working acertaining all their details and how it affects the real estate market, so check back shortly for a post about the plan. In the meantime, you can read a preview of the plan I wrote prior to last week's official announcement.

The U.S. unemployment figures also dominated headlines as 651,000 jobs were lost in February, pushing our unemployment rate to 8.1%, the highest rate in over 25 years. The Dow also pierced through 7,000 for the first time since 1997.

Mortgage Rates

Negative news in the stock market helped improve mortgage rates from where they began the week; however, they remained relatively unchanged from the previous week. Bankrate.com's national survey of large lenders reported an average 30-year fixed rate mortgage for last week of 5.41%, although that sounds a little high in my opinion.

Forecast for the Week

This week is relatively quiet with not many economic reports due out. However, the volatility in the stock market and details from the Making Home Affordable Plan can change mortgage rates rather quickly. Retail Sales and Consumer Sentiment Index will be announced Thursday and Friday which will likely be negative as more Americans loose their jobs and rein in their spending. Therefore, keep an eye out for how these reports affect mortgage rates. Remember the correlation between economic data and mortgage rates -- weaker than expected economic data is generally good for rates, and visa versa. However, this equation hasn't always held true in our current economic times as investors flee to the least risky investments.