For the second month in a row, the 11th District Cost of Funds Index has descended deeper into record-low territory.
On Wednesday, the Federal Home Loan Bank of San Francisco reported that COFI came in at 0.598 percent in October.
Last month’s index turned out to be the lowest on record based on historical FHLB data going back as far as July 1981.
COFI was
0.601 percent in September 2016, an all-time low at the time. In October 2015, the index was 0.649 percent.
The FHLB determines COFI based on interest expense of member banks based in Arizona, California and Nevada. October 2016’s index was calculated based on $15.5 billion in average total funds.
Although COFI is used as an index to determine rate changes on some legacy adjustable-rate mortgages, a much more widely utilized index is the yield on the one-year Treasury note, which finished October at 0.66 percent, according to the Department of the Treasury. The yield rose from 0.59 percent at the end of September
The one-year Treasury yield closed out November at
0.80 percent.
ARM share was 9.9 percent
in the U.S. Mortgage Market Index report from Mortgage Daily and OpenClose for the week ended Nov. 25, thinning from 10.5 percent the previous week.
