The popular 11th District average cost of funds index reversed course yet again, and during the process set a new record.
The index -- known by the acronym COFI -- declined to 1.811% in January, according to the Federal Home Loan Bank of San Francisco. Published reports say the average is at its lowest level since the government sponsored housing enterprise began reporting the index nearly 23 years ago.
COFI, which is announced about 30 days following the end of each month, was at 1.902% in December, when it broke a 17-month declining streak, while a year ago it stood at 2.308%.
COFI gauges thrift deposit and financing costs during a given month by all savings institution members headquartered in Arizona, California, and Nevada. The average total funds for these institutions used in the January calculation of the index was $405.7 billion, up slightly from $405.1 billion the previous month.
The one-year Treasury index (which competes with the COFI for adjustable-rate mortgages) is way above the COFI even as it reportedly fell to a seven month low averaging 3.50% last week by Freddie Mac. Meanwhile, ARMs were more than a quarter of the share of total mortgage applications -- double the demand around the same time last year, said the Mortgage Bankers Association of America.