The cost of funds index declined in July. If other ARM indices are any indicator, COFI likely fell further in August.
At 1.473%, July’s COFI was 13 basis points lower than 1.599% in June, data released yesterday from the Federal Home Loan Bank of San Francisco indicated. The index was also lower than 2.698% in July 2008.
COFI is calculated based on the interest expenses of 11th District members headquartered in Arizona, California and Nevada. July’s interest expense was based on average total funds of $91.2 billion, lower than $93.5 billion in June.
A more widely used index for adjustable-rate mortgages, the yield on the one-year Treasury bill, ended July at 0.48%, lower than 0.56% at the end of June, according to data reported by the U.S. Department of the Treasury. The one-year yield was 0.43% yesterday.
The six-month London Interbank Offered Rate was 0.94% at the end of July, down from 1.15% at the end of June, Bankrate.com reported. LIBOR ended August at 0.79%.
The Mortgage Bankers Association’s latest weekly application survey indicated ARM share was 6.5 percent.
