While the leading home sales and inflation indicators continue to sink the sector into a deeper recession, the pending home sales report has once again induced hope that a bottom may be forming. The National Association of Realtors’ gauge of existing home sales that are in contract beat the market’s outlook for a 0.4 percent contraction by printing a 6.3 percent pickup through the month of April, the biggest improvement from the indicator sice October of 2001. From a historical basis, sales are at their highest overall level in six months. This rebound is likely a by-product of the steady decline in asking prices as home owners and banks try to unload their assets. On the other hand, there is still looming hurdles for a true recovery in rising mortgage rates, sticter lending policies and ongoing foreclosures. These ongoing problems are reflected in the long-term which shows sales are still 13.8 percent below last year’s levels. For the market to truely believe in a housing rebound, advanced readings for new home sales and construction activity will have to show a reliable rebound. - John Kicklighter, Currency Analyst for DailyFX.com