COFI Falls for 4th Month in a Row

During May, the Eleventh Federal Home Loan District Cost of Funds Index continued its decline, falling by over 2 basis points to 4.881%.In April, the index was 4.903%. [Click here to see the chart.] This is the fourth consecutive month COFI has fallen, after peaking in January at 4.987%. This index is considered to be a lagging indicator and will continue to decline for a period after other rates have started to rise. Freddie Mac's Primary Mortgage Market Survey found that the average commitment rate for the one-year adjustable-rate mortgage increased by 2 bp between April and May to 5.69%; for January the average commitment rate was 5.54%. For 30-year fixed-rate mortgages, the survey found the average commitment rate remaining at 7.14% for the second straight month, although the weekly findings of the survey put the average commitment rate at under 6.96% for the week ended June 26.