11th District Cost of Funds Nears 9-Year High

The 11th District cost of funds--the rate to which many adjustable-rate home mortgage loans are tied--rose again in December to 5.617% from 5.607% in November, the Federal Home Loan Bank of San Francisco reported. The rate tends to lag changes in market interest rates, such as those being cut by the Federal Reserve Board, by several months and it’s been on a steady climb for more than a year. It stands at its highest level since February 1992, when it was 5.800%. The rate, which stood at 4.852% in December 1999, measures the average cost of funds for the savings institutions in the federal bank system’s 11th District, which includes California, Arizona and Nevada.