Mortgage Rate Update February 28, 2013
After improving slightly at the beginning of this week mortgage rates are now basically unchanged from last Thursday.
After US interest rates increased by .25%-.375% in January they have basically remained steady in February. Fear over the US government spending sequester and renewed concerns over Europe are mostly the reason why.

The $85 billion spending sequester (see HERE for a 90 second explanation) is set to take place beginning tomorrow. The actual effects of the spending cuts probably won’t be felt in the economy until early April when federal employees actually begin getting furlough days.
Given that the Dow Jones Industrial Average has risen by 200+ points in the past two days it seems that most analysts believe some sort of budget compromise will be reached. Albeit, I anticipate it will be half-baked at best.
Italian elections which took place on Monday failed to reach a coalition amongst its political parties which is causing uncertainty. Uncertainty helps US interest rates remain low.
Also helping keeping interest rates low is the Fed’s commitment to buy $85 billion of long-term debt securities (also known as ‘quantitative easing’). Fed chairman Ben Bernanke explicitly stated yesterday that the Fed was committed to the program until the economy was on a stronger footing.
Current Outlook: neutral