September’s Key Mortgage Rate Creeps Higher

The 11th District cost of funds--the rate to which many adjustable-rate home mortgage loans are tied--rose to 4.941% in September from 4.904% in August, the Federal Home Loan Bank of San Francisco reported. The rate has been gradually moving higher in recent months and is closing in on its level of early 1996, when it stood just above 5%. The rate, which tends to lag changes in market interest rates by several months, measures the average cost of funds for the thrifts and other financial institutions in the bank’s 11th District, which covers California, Arizona and Nevada.