COFI and the 1-year Treasury worsened from a month earlier while the LIBOR was barely changed.
The Cost of Funds Index was 4.293% in May, the Federal Home Loan Bank of San Francisco reported today. COFI rose from 4.224% in April and was 41 basis points higher than a year earlier.
The index, reported about 30 days following the end of each month, is based on interest expense for 11th District members headquartered in Arizona, California and Nevada. During the latest month, $439.8 billion average total funds were used in the calculation of COFI.
A competing index for adjustable-rate mortgage is the 6-month London Interbank Offered Rate -- or LIBOR, which Fannie Mae reported at 5.3817% in June. The LIBOR was almost unchanged from May and was lower than 5.6382 reported for June 2006.
Another ARM index, the 1-year Treasury index, was 4.95% Thursday, according to Federal Reserve data. A month earlier the 1-year was 4.93% and a year earlier it was 5.30%.
ARMs, which have become more attractive because fixed mortgage rates are rising more, accounted for 20 percent of applications reported in the latest weekly survey from the Mortgage Bankers Association.