COFI Still Rising

The Eleventh Federal Home Loan District Cost of Funds Index for November stood at 3.190%, an increase of over 11 basis points from 3.074% in October.The index is computed from the actual interest expense from the savings institution members of the Federal Home Loan District of San Francisco. For comparison purposes, the monthly average commitment rate for the one-year adjustable-rate mortgage (according to the Freddie Mac Primary Mortgage Market Survey) was 5.14% in November, up over 28 bps from 4.86% in October. In the first 11 months of the year, both COFI and the average rate for the one-year ARM rose over one percentage point. COFI stood at 2.183% in January, compared with 4.12% for the one-year ARM. However, much of the gain in the one-year ARM was from September to November, with the average rising 25 bps in October. Meanwhile, the rise in COFI has been on a more even pace, which has been touted as one of the consumer benefits of using this rate as an ARM index.