The budding couple were spotted on a low-key date on Sunday at Los Angeles hot spot E.P. & L.P. and showed off some subtle P.D.A.
“Niall had his arm around Hailee and they were holding hands,” an onlooker tells PEOPLE exclusively. “They definitely looked like a couple.”
The entertainers sparked romance rumors in February when they were spotted singing and dancing together at a Backstreet Boys show, but a source told PEOPLE at the time the actress, 21, was newly single and not ready to jump into a new relationship.
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“She’s not actively pursuing anything. Niall is really into her but she’s unsure if she wants to get into something new right away,” said the source.
The “Slow Hands” singer, 24, however, seems to have won her over.
In December, the former One Direction singer gushed about the star on Instagram for her birthday, calling her the “loveliest person on the planet and one of my best friends.”