Hope springs eternal.

Contract activity in the still-frozen, but hopefully thawing, US housing market managed a third consecutive gain in April, an update on the marquee measure of pending home sales showed.

The NAR’s gauge, at 74.8, remains subdued, but as the figure below shows, we’re witnessing an inflection during the spring buying season.

Lawrence Yun, the NAR’s chief economist, described “cautious optimism” among buyers “despite increasing economic uncertainty and a slight rise in mortgage rates.”

I’m not sure I’d call the increase in financing costs “slight.” Rates rose ~50bps from pre-war levels through mid-April. That’s meaningful for buyers already struggling to make the math work.

Tuesday’s update came on the heels of a predictably lackluster read on builder sentiment. Although the NAHB’s measure managed to gain this month, it’s still nowhere near levels indicative of net optimism. Price cuts and incentives in the new construction market remain elevated.

Speaking of price cuts, they’re not quite as pervasive in the resale market as they were a few months ago. According to Redfin, 35.4% of sellers cut their asking price last month, down from 35.6% in March.

The record high, Dana Anderson noted, was 36.6% in August. In early 2022, just prior to the first Fed rate hike, that share was a mere 12%.