After edging up in December, the Cost of Funds Index reversed course and fell to the lowest level on record.
COFIÂ fell below 1 percent for the first time and came in at 0.962 percent in January — its lowest level ever based on data going back to 1981.
The index, which is used to determine rate and payment adjustments on some adjustable-rate mortgages, was 1.071 percent in December, while it stood at 1.224 percent in January 2012.
COFI is determined based on the interest expense of members of the Federal Home Loan Bank of San Francisco. Eleventh District FHLB members are based in Arizona, California and Nevada.
Average total funds used in COFI’s latest calculation were $34.4 billion.
A more widely used ARM index is the yield on the one-year Treasury note, which slipped from 0.16 percent at the end of December to 0.15 percent as of Jan. 31, according to data from the Department of the Treasury. The one-year Treasury yield finished February at 0.17 percent.
ARMs accounted for slightly less than 4.2 percent of all activity in the U.S. Mortgage Market Index report from Optimal Blue and Mortgage Daily for the week ended Feb. 22, about the same as the previous week.
