COFI Dips

The Eleventh Federal Home Loan District Cost of Funds Index declined by less than one basis point in July.According to the Federal Home Loan Bank of San Francisco, which calculates the weighted-average index, COFI fell from 4.283% in June to 4.277% in July. Because of the weighted-average feature, COFI tends to lag movements in other indices by three to six months. For comparative purposes, the monthly average for the one-year adjustable-rate mortgage reached 5.71% in July, its highest level since reaching 5.79% in July 2006, according to the Freddie Mac Primary Mortgage Market Survey. The survey showed mostly downward movement until December, when it hit 5.45%. There were a couple of small gains in the average rate in January and February, before declining one last time in March. However, the biggest rise in the average rate for the one-year ARM came in June, when it rose 16 bps to 5.68%. COFI peaked in December 2006 at 4.392% before beginning its current mostly downward movement.