Following two consecutive months of increases, the Cost of Funds Index relented and returned to its all-time low.
In May, COFI fell to 0.667 percent — the lowest it’s ever been based on the oldest available data going back to July 1981.
May marked the fifth consecutive month that COFIÂ had set a record. But the index turned higher in June and increased again the following month.
COFI wound up at 0.676 percent in July, according to the Federal Home Loan Bank of San Francisco.
The index is determined based on 11th District FHLB members with headquarters in Arizona, California or Nevada.
COFI, which is used to determine rate and payment changes on some adjustable-rate mortgages, fell back down to 0.667 percent in August — matching the all-time record.
A year earlier, the index was 0.956 percent.
A more significant ARM index, the one-year Treasury yield, tumbled from 0.12 percent at the end of July to 0.09 percent at the end of August, according to Treasury Department data.
The one-year yield has since bounced up to 0.13 percent Tuesday.
ARMs accounted for 11.9 percent of all pricing inquiries in the U.S. Mortgage Market Index report from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Sept. 26.
