COFI Declines for 3rd Consecutive Month

For the first time since it bottomed out in May 2004, the Eleventh Federal Home Loan District Cost of Funds Index has declined for several months in a row.The index, as calculated by the Federal Home Loan Bank of San Francisco, stood at 4.299% in March, representing a decline of almost 8 basis points from 4.376% in February. It declined 0.4 of a basis point in January, followed by a 1.6-bp decline in February. Previously, there had been a single-month drop in the rate, in October 2006. Back then COFI declined by nearly 4 bps, before reaching its latest peak of 4.396% in December. For comparative purposes, the average rate for the one-year adjustable-rate mortgage in the Freddie Mac Primary Mortgage Market Survey peaked last July at 5.79%. Since then it has mostly declined, and for April it stood at 5.45%. The FHLBank can be found online at http://www.fhlbsf.com.