The average Cost of Funds Index eased for the second consecutive month.
The index was 4.277 percent in July, the Federal Home Loan Bank of San Francisco reported Friday. The index was down from 4.283 percent in June but higher than 4.177 percent a year earlier.
COFI is calculated using the total interest expenses of 11th District member institutions headquartered in Arizona, California and Nevada. The average total funds used in July's calculations were $437.8 billion, up $1.7 billion from the previous month.
The share of applications that are for adjustable-rate mortgages has recently fallen from nearly one-quarter early last month to just 15 percent, according to data from the Mortgage Bankers Association.
A competing ARM index, the 1-year Treasury, yielded 4.19 percent Friday -- 66 basis points lower than a month earlier.