The Cost of Funds Index fell to its lowest level in 15 months.
Closing out January at 1.484 percent, COFI improved slightly from the prior month’s 1.508 percent, the Federal Home Loan Bank of San Francisco reported.
The decline was more stark when compared to 1.786 percent in January 2010.
The last time COFI was this low was in October 2009, when it stood at 1.259 percent.
The index, which was first published in August 1981, is determined based on interest expenses at 11th District FHLB members with headquarters in Arizona, California and Nevada. January’s index reflected interest expense on average total funds of $35.7 billion.
While COFI serves as the index on some adjustable-rate mortgages, a much more prominent ARM index is the yield on the one-year Treasury, which closed out January at 0.26 percent, better than 0.29 percent at the end of last year.
The one-year was 0.27 percent on Friday.
ARMs accounted for 9.45 percent of activity in the Mortgage Market Index for the week ended Feb. 25, off from 9.50 percent seven days earlier.
