The West Coast-based index for adjustable-rate mortgages edged up for the seventh consecutive month to its highest level last year.
The cost of funds index, or COFI as it is widely known, ended the year at 2.118%, up from 2.025% in November, according to the Federal Home Loan Bank of San Francisco. In December 2003, the index was at 1.902%.
The COFI is computed by the actual interest expenses reported for a a given month by Arizona, California and Nevada savings institution members of the bank, which reports the data about 30 days following the end of each month.
The average total funds in December used to calculate the COFI were reportedly $477.5 billion.
COFI-indexed ARMs compete with 1-year Treasury-indexed ARMs, which last week averaged 4.18%. ARMs currently make up nearly one-third of mortgage applications.