The 11th District Cost of Funds Index and the 6-month London Interbank Offered Rate continued climbing.
During December, the average Cost of Funds Index was 4.396%, nudging up about 4 basis points from the previous month, according to the Federal Home Loan Bank of San Francisco, which reports the index on a one-month lag. In December 2005, the COFI was 3.296%.
Average total funds of $487.3 billion were reportedly used in December's calculation of COFI, which reflects interest expense for member institutions based in Arizona, California and Nevada.
Meanwhile, the 6-month London Interbank Offered Rate was 5.4014% in January, Fannie Mae reported. The figure is about 4 BPS higher than in the prior month and approximately 59 BPS above the level in January 2006.
Both the COFI and LIBOR have increased for the last two consecutive months.
The 1-year Treasury, another competing index for adjustable-rate mortgage applications, was 5.11% on Tuesday, up 11 BPS from a month earlier, Federal Reserve data showed.
ARM applications account for a little over one-fifth of all mortgage requests, the Mortgage Bankers Association said on Wednesday.