There are tentative signs of improvement in a key sector of China's economy, as lower prices start to lure buyers back into the battered housing market.

The nascent uptick in home sales hasn't yet translated to a restarting of construction, a driver of jobs and economic activity, because the supply of empty homes that built up during the boom remains large. Still, the fact that Chinese households are responding to falling mortgage costs and lower real-estate prices is a positive sign for consumer spending in the world's third-biggest economy.

Wall Street Journal