US MBA Purchase Index Falls for Two Consecutive Weeks, Surging Mortgage Rates Hit Housing Demand Hard

China's Q3 Financial Institution Loan YoY Growth Drops to Record Low of 4.8%, Credit Structure Divergence Intensifies

Data from the People's Bank of China (PBOC) shows that the year-over-year growth rate of outstanding financial institution loans fell to 4.8% in Q3 2026 (September), further dipping from 4.9% in the previous month, matching pessimistic market expectations and continuing to hit record lows. This indicates that despite frequent official measures to rescue the market, the overall pace of credit expansion remains constrained by sluggish domestic demand and weak market confidence, reflecting a deeply mired situation. Taking a closer look at the credit structure, new RMB loans for the single month of September reached 1.08 trillion yuan. Although higher than the market estimate of 975 billion yuan, it was primarily supported by the corporate sector. Corporate medium-to-long-term loans increased significantly that month, while household loans, which reflect mortgages and consumption, showed contraction or remained flat, highlighting a hot-and-cold divergence of "enterprises daring to borrow, while citizens refraining from borrowing." Furthermore, the broad money supply (M2) in September grew by only 7.2% year-over-year, hitting an 18-month low, reflecting that liquidity transmission within the system remains weak. Bloomberg Economics and Capital Economics pointed out that the bottoming out of credit growth is not merely a policy failure, but stems from deep structural shifts. On one hand, the prolonged slump in the real estate market and households' deleveraging mindset have drastically slashed mortgage demand; on the other hand, China is shifting its industrial focus to high-tech sectors. These new economic drivers rely more heavily on bond and equity financing, naturally having a lower dependence on traditional bank credit, making the "deceleration" of loans an inevitable outcome. Looking ahead to the short term (1-2 months), with the PBOC continuously injecting liquidity through loose monetary tools such as outright reverse repos, RRR cuts, and interest rate cuts, corporate-side infrastructure and project financing are expected to stabilize first. However, looking at the medium term (3-6 months), sluggish consumer confidence and the ticking time bomb of the housing market remain the biggest headwinds. Without larger-scale fiscal stimulus directly targeting end demand, the year-over-year growth rate of financial institution loans may hover at low levels, and "emphasizing quality over quantity" will continue to dominate the broad direction of China's credit market. 內地9月社融增3.55萬億 新增貸款減16% - 20261015 - 經濟 - 每日明報 - 明報新聞網 China’s September Bank Lending Jumped, But Demand Still Looks Soft - Finimize