The Eleventh Federal Home Loan District Cost of Funds Index fell two basis points in January, to 1.484%. This is the 10th consecutive month of decline in the index, which has been used by some West Coast lenders to set adjustable-rate mortgages.
Because of the way it is calculated by the Federal Home Loan Bank of San Francisco, the index typically lags other rate changes by between three and six months.
In comparison, the monthly average commitment rate for the one-year ARM, according to the Freddie Mac Primary Mortgage Market Survey, declined every month between January and November last year. It increased by six basis points in December, fell by six basis points in January before increasing by 10 basis points in February.
The same survey for the 30-year fixed-rate mortgage shows rates falling between April and October last year, before starting to rise in November and have been increasing since then.
For January, FHLB-SF used total average funds of $35.7 billion and total interest expense of $44.2 million in making its COFI calculation.
