The 11th District Cost of Funds Index declined for the second consecutive month.
COFI was 4.376% in February, down from 4.392% a month earlier, according to the Federal Home Loan Bank of San Francisco. During February 2006, the index averaged 3.604%.
COFI, which is reported about 30 days following the end of each month, was calculated based on the interest expense of member institutions based in Arizona, California and Nevada. For February, $471.5 billion in average total funds was used in the calculation.
A competing index for adjustable-rate mortgages, the 1-year Treasury, yielded 4.90% Thursday, according to Federal Reserve data. A month earlier the 1-year yield was 4.96%.
In the aggregate, ARMs represented 20% of all applications reported in the latest Mortgage Bankers Association survey.