The cost of funds index will not stop falling.
COFI was 2.829% during June, the Federal Home Loan Bank of San Francisco announced today. The index fell from 2.918% in May and 4.283% in June 2007.
COFI has fallen each of the last nine months and has not been this low since July 2005, when it stood at 2.757%.
The index is calculated based on the interest expense for 11th District member institutions headquartered in Arizona, California and Nevada. Average total funds used in the latest calculation was $400.0 billion.
Another index used for adjustable-rate mortgages is the 1-year Treasury, which yielded 2.27% today, according to data from the U.S. Treasury. The 1-year yielded 2.36% on June 30.
ARMs accounted for 7.3% of total applications tracked in the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending July 25. The ARM share was 8.5% in the week ending June 27.