Interest expenses for West Coast banks dropped -- bringing lower a popular index for adjustable-rate mortgages.
The cost of funds index was 4.238% in June, falling from 4.293% the previous month, the 11th District Federal Home Loan Bank of San Francisco reported today. A year earlier, the index was at 4.090%.
COFI is calculated based on the cost of money for 25 eligible institutions headquartered in Arizona, California or Nevada. Average total funds of $436.1 billion were used in June's calculation.
Another index competing for adjustable-rate mortgages is the 1-year Treasury, which yielded 4.87% Monday, about 4 basis points better than a month earlier.
The share of loan applications that are for an ARM was 21 percent in the Mortgage Bankers Association's latest weekly survey.