The Cost of Funds Index eased, as did another index used for adjustable-rate loans.
The Federal Home Loan Bank of San Francisco today reported COFI at 1.791 percent for May. The index was lower than 1.825 percent in April and 1.832 percent a year earlier.
COFI is based on interest expenses reported for deposit accounts, FHLB advances and other borrowings at FHLB members with headquarters in Arizona, California and Nevada.
Those institutions’ average total funds used in May’s calculation were $38.0 billion.
A competing index for adjustable-rate mortgages, the yield on the one-year Treasury bill, ended May at 0.34 percent, also falling from April — when the yield stood at 0.41 percent, according to data from the U.S. Department of the Treasury. Today the one-year yield closed even lower: 0.32 percent.
But the six-month London Interbank Offered Rate, which is used as an index for many subprime ARMs, closed out May at 0.76%, surging from 0.51 percent at the end of April, according to Bankrate.com. LIBOR closed today at 0.75 percent.
ARMs accounted for 4.7 percent of loan applications in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended June 25. The low level of activity reflects record-low fixed mortgage rates.
