The Eleventh Federal Home Loan District Cost of Funds Index for December is 4.072%, a 10 basis points decline from November's 4.172%. The index is a weighted index calculation of the cost of mortgage funds for thrifts that belong to the Federal Home Loan Bank of San Francisco. Reversing the trend of the previous two years, COFI has declined by 32 basis points between last December and this one; in 2005 and 2006, the index increased by 110 basis points in both years. Out of the preceding 12 months, COFI increased in just three. In May, it rose by 7 bps; in August there was an 8 bps increase, followed by an increase of slightly over 2 bps in September. For comparative purposes, according to the Freddie Mac Primary Mortgage Market Survey, the one-year adjustable rate mortgage was at 5.45% in December 2006. It hit 5.71% in July, before trending down again to 5.50% in December 2007, a net increase of 5 bps during the year.

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