China’s Economy reopened in 2023 and many economists predicted there would be economic boom similar to the US when our economy opened post covid restrictions. China’s economy didn’t experience the same amount of ‘revenge spending’ that the US economy did. Guided tours booked in China are down from 3.7M pre-covid to 52,000 or a 99% decline. According to the China Beige Book which endeavors to provide hard-to-access data on the Chinese economy: ‘two-sided household spending on goods and experiences fizzled out in July”. While spending on hotels and dining out has increased, spending on big-ticket items like automobiles and luxury goods has been inconsistent. Chinese consumers are more conservative in their spending habits averaging a 50% savings rate compared to the US savings rate of under 20%.
Mortgage Rates increased this week as the price of Mortgaged Backed Securities continues to trend slowly downward. Rates are up approximately 1.375% from this time last year.
Credit Card Debt – Knowledge Leaders Capital Reports that over the prior 2 years delinquency rates have doubled from 2.5% to 5%. Of 18-29 year-olds 1 in 12 is 90+ days late in making credit card payments. We are in the early stages of a consumer credit cycle and it will be interesting to see how student loan payments impact this crunch as Fed loan payments start up again next month.
New Listings increased by 3.5% in August and are down 7.9% year over year. Listings continue to remain down significantly from the pre-covid era.
Mortgage Applications to purchase homes declined 2% last week and are down 28% year over year. Refinances declined 5% last week and are down 30% year over year. Refinance applications dipped 5% last week and are down 30% year over year.