COFI Keeps Rising

The Eleventh Federal Home Loan District Cost of Funds Index for September stood at 4.382%, a rise of 10.5 basis points from 4.277% in August.The index is a weighted calculation of the cost of mortgage lending funds used by members of the Federal Home Loan Bank of San Francisco, and is announced on the last day of the following month. In July 2004, the Federal Open Market Committee began a series of 17 increases of the federal funds rate, finally halting at its Aug. 8, 2006 meeting, and taking no action at two meetings since then. The increases totaled 425 basis points. The 30-year fixed rate mortgage reached a low of 5.45% in March 2004, according to the Freddie Mac Primary Mortgage Market Survey. It peaked at 6.76% in July 2006 before falling to 6.36% in October. The same survey shows the one-year adjustable-rate mortgage bottoming at 3.41% in March 2004 and rising to 5.79% this July before falling back to 5.55% in October. From trough to peak, the rise totaled 238 bps. In comparison, COFI bottomed out at 1.708% in May 2004. Since then, it has added 267 bps.