The Eleventh Federal Home Loan District Cost of Funds Index continues its climb, increasing by 9 basis points in December to 2.118%.The index is a weighted average calculated by the Federal Home Loan Bank of San Francisco of the interest expense for thrifts in Arizona, California, and Nevada to originate mortgage loans. For the first time since 2000, COFI has ended the year higher than it was at the end of the previous year. COFI stood at 1.902% in December 2003. The index then spent the next five months continuing its decline, until it reached bottom in May, at 1.708%. In seven months the index has risen 40 bps, a relatively small gain given how fast the index fell. The index is now at its highest level since June 2003. COFI's most recent peak was in December 2000, at 5.617%.

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