The U.S. housing market showed recovery signs in May despite high home prices and interest rates, with the Pending Home Sales Index rising 3.8% month-over-month to 76.8, its highest in nearly six months. However, activity remains well below historical peaks, especially when adjusted for population growth. Lower oil prices may ease mortgage costs slightly, but high federal financing needs and tech investments limit rate declines. The market may see moderate recovery if mortgage rates drop and housing supply improves.