By Brian O’Connell
The start of the week comes with no major interest rate fluctuations on mortgage rates, as the BankingMyWay National Average Rates show 30-year-fixed interest rates holding steady at 5.03% - the same rate as last week; and 15-year-fixed rate mortgages at 4.71% - down two ticks from last week’s rate of 4.73%.

The mortgage market is seeing some downward rate movement from one-and three-year adjustable rate mortgages; with one-year ARM’s at 5.08% versus 5.36% from last week; and three-year ARM’s at 4.88% versus 5.13% from the week before.

The mortgage market may be stabilizing a bit, buoyed by good earnings from the banking market, as Wells Fargo (Stock Quote: WFC), Citi (Stock Quote C) and now Bank of America (Stock Quote: BAC) have all posted better-than expected earnings results for the first quarter of 2009.

More good news for the banking sector as a senior U.S. Treasury official says that the government’s “stress test” of 19 major U.S. banks won’t result in any major shocks, and that most U.S. banks tested had “substantial value”.

Tempering enthusiasm about banks on Wall Street is a concern that, despite the positive earnings numbers, the banking sector is a long way from full recovery, and that credit is still an ongoing problem.

For potential mortgage buyers, relative strength in the U.S. banking sector, and the U.S. stock market, could mean higher rates down the road if the picture remains unchanged. Stocks have posted positive gains for six consecutive weeks, and that rally has drawn money out of ‘safe haven’ assets like bonds. When the bond market loses value to the equity side of the market, mortgage rates tend to rise to make up the difference.

Still, there are no major economic signals pointing to either short- or long-term significant hikes in mortgage rates. Consequently, for borrowers with good credit scores and ample cash, there should be little problem in locking in 30-year fixed mortgage rates of under 5%.

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