The Cost of Funds Index decreased for the first time in 29 months.
The index was 4.346% in October, falling from 4.382% the prior month, the Federal Home Loan Bank of San Francisco reported Thursday. COFI stood at 3.074% during October 2005.
COFI, which the FHLB reports on a one-month lag, reflects interest expense for member institutions headquartered in Arizona, California, and Nevada. Average total funds used in the latest calculations were $489.2 billion, according to the data.
October's activity represents the first monthly decrease since May 2004 -- when COFI stood at 1.708%.
A competing index for adjustable rate mortgages, the 1-year Treasury, stood at a 4.98% yield Wednesday, according to Federal Reserve Data. The 1-year yield was 4.95% on Nov. 1.