The Eleventh Federal Home Loan District Cost of Funds Index increased seven basis points between November and December to 1.071%.
This is the first measurable increase in COFI since between last November and December when it increased by two basis points (the following month there was an increase of 0.3 basis points).
In November, the index set a record low of 1%. A spokeswoman for the Federal Home Loan Bank of San Francisco, which calculates COFI on a weighted average basis, said at the time it is possible for it to go even lower.
The increase brings COFI to its highest level since last July, when it was 1.091%. It is also the largest increase in the index since a 24 basis point rise recorded between February 2010 and March 2010.
COFI is calculated based on the cost of funds used by FHLB of San Francisco savings institution members in California, Arizona and Nevada to originate mortgages. For December, there were 16 members that reported data.
December’s total average funds were $34.9 billion and total interest expense was $31.1 million. In November, the total average funds were $34.8 billion and total interest expense was $29 million.