After declining for 17 consecutive months, one index for adjustable-rate mortgages rose.
The 11th District monthly weighted average Cost of Funds Index -- or COFI -- rose to 1.902% in December, breaking the descending trend experienced since July 2002, according to the Federal Home Loan Bank of San Francisco. The index, which is reported about 30 days following the end of each month, was at 1.821% the prior month, while a year ago it stood at 2.375%.
The COFI reflects actual interest expenses recognized during a given month by all savings institution members headquartered in Arizona, California, and Nevada. In December, the average total funds for these institutions used in the calculation of the index was $405.1 billion, compared to $400.8 billion the previous month.
Last week, Freddie Mac said the 1-year Treasury-indexed ARM average rose slightly to 3.59%. The 1-year Treasury competes with COFI for ARM loans, which recently accounted for 26.3% of total mortgage applications, reported the Mortgage Bankers Association of America.