In September, US existing home sales dropped after two consecutive monthly increases. Existing home sales fell by 1.7% M/M to a total level of 4.75 million, exactly in line with expectations. The details show that the decline was due to falling sales of single-family homes (-1.9% M/M) while sales of condo’s stabilized in September. Regional data show that the fall back was mainly based in the Northeast (-6.3% M/M), but sales dropped also slightly in the West (-3.4% M/M) and Midwest (-0.9% M/M), while existing home sales rose marginally in the South (0.5% M/M). The number of existing homes for sale fell by 3.3% M/M to 2.320 million and months’ supply fell from 6.0 to 5.9. After two consecutive monthly increases, the drop in existing home sales is no surprise and was exactly in line with expectations as inventories are tight, limiting the potential for existing home sales to gain much further.