The average cost of funds during August for some western-based savings institutions fell for the second consecutive month, lingering near its lowest point in decades.
The Federal Home Loan Bank of San Francisco announced yesterday that the monthly weighted average cost of funds index (COFI) for 11th District savings institutions fell 0.058%, or 5.8 basis points from the prior month to 2.763%.
COFI reflects the actual interest expenses paid during a given month for all member savings institutions headquartered in Arizona, California, and Nevada. It is used as an index on some adjustable rate mortgage (ARM) loans.
COFI reached its lowest point in decades last March, falling to 2.653%.
The index has fallen in all but three months since December 2000.
Last week, Freddie Mac reported in its survey of thrifts, commercial banks and mortgage lending companies that the average one-year ARM fell to 4.22%, its lowest point in eight years.