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Mortgage rates continue their two-week slide, with 30-year fixed rates falling from 5.62% to 5.58%, and 15-year fixed rates slipping from 5.12% to 5.06% last week.

But adjustable rate mortgages rates took the opposite route, with one-year ARM’s rising from 4.75% to 5.00% - a shot in the gut to short-term ARM borrowers – and five-year ARM’s jumping from 5.17% to 5.30%.

Mortgage rates continue to drift upward and down, although economists, and probably millions of potential mortgage borrowers thought that the Federal Reserve might make a move on interest rates last week, an event that did not transpire. Or, at least send a signal that it would buy up more troubled mortgage assets, a strategy that helped drop mortgage rates below 5% earlier in 2009.

But there is a silver lining. Any signal from the Fed that inflation was looming would have sent mortgage rates spiraling upward (mortgage rates tend to rise in periods of higher inflation). Not only did the Fed not say that inflation was a threat, it took great pains to say that inflation was pretty much contained, thus freeing up last week’s decline in home mortgage rates.

The first week of the current two-week downward trend has also spurred a moderate rise in new mortgage applications, with the Mortgage Banker’s Association reporting that applications rose 6.6% for the week of June 12 – June 19. That could mean that mortgage customers aren’t sure where rates are going, so they’re snapping up rates in the 5%-to-5.50% range, depending on their credit scores.

Also helping mortgage borrowers, for the moment at least is a bump-up in interest in U.S. Treasury bonds. Last Thursday’s auction of seven-year Treasuries drew solid interest, alleviating anxieties that foreign investors were turning their back on U.S. debt. That knocked Treasury rates down, as suddenly enthusiastic (again, for the moment) investors poured assets into Treasuries last week, driving prices up, and interest rates down. When Treasury prices are in retreat, mortgage rates usually follow the trend.

Finally, a report from the U.S. Commerce Department last week showed some stabilization in the housing market, as new single-family homes reached 342,000 in May. That number was only down a measly 0.6% from April, a reasonably healthy sign that the new home market isn’t in a free-fall anymore.

As a result, with no alarming news from the Fed, no rush to the exits from U.S. Treasury bond investors, and a solidifying housing market, low mortgage rates should be around for another few weeks.

For the best deals on mortgage rates, visit the BankingMyWay rate search tool.

— For more ways to save, spend, invest and borrow, visit MainStreet.com.