COFI Hits Another Low

While rates for the 30-year fixed-rate mortgage continue to rise, the Eleventh Federal Home Loan Bank District Cost of Funds Index has once again set a record low.The July index level of 2.113% is almost 10 basis points below the 2.018% level recorded in June. Because it is a weighted average on the interest paid by savings institutions in Arizona, California, and Nevada on money used to fund mortgages, COFI tends to lag other interest rate movements. In contrast to COFI, the Freddie Mac Primary Mortgage Market Survey shows average fixed rates on a 30-year mortgage going from 5.21% in mid-June to 6.32% for the last week of August. Also worth noting is that the average rate for the one-year adjustable-rate mortgage bottomed out at the end of June at 3.45% and had only risen 43 bps to 3.88% by the end of August.