Is the US housing market actually tipping in buyers’ favor? We wouldn’t bet the house on it.

While June typically marks the hottest point of the year for home sales, last month saw a decline instead, as prices rose to a record high, according to data released last week by the National Association of Realtors (NAR). Can anything help homebuyers out?

The Laws of Market Gravity

Prospective buyers have had reason for a smidge of optimism so far this year. A RedFin report published in May showed that sellers outnumbered buyers in the US by half a million. Meanwhile, data from the US Census Bureau in June showed the inventory of completed new homes reached the highest point since 2009. Translation: Supply is outstripping demand. And yet, the polarity of market dynamics seems permanently reversed in sellers’ favor.

In June, existing home sales declined 2.7% from May (and were unmoved year-over-year), according to the NAR, while the median existing-home sale price rose 2% year-over-year to $435,000, an all-time high after 24 straight months of year-over-year price increases.

The culprits behind the stagnation, it seems, are fairly simple:

• “Multiple years of undersupply are driving the record-high home price,” NAR chief economist Lawrence Yun wrote in the report. “More supply is needed to increase the share of first-time homebuyers in the coming years, even though some markets appear to have a temporary oversupply at the moment.”
• Meanwhile, Yun writes that elevated mortgage rates are playing a major role in locking out first-time buyers as well, claiming that a decline in rates to 6% — from a level of around 6.75% for a 30-year fixed mortgage through most of June — could tip the market in buyers’ favor.

Hope is Where the Heart Is: Making matters worse? Economic uncertainty. Case in point: About 15% of pending home sale agreements fell apart in June, per a RedFin report published Thursday, marking a record high for the month and likely a sign that prospective buyers are proving too skittish to ultimately pull the trigger. “Some buyers are canceling deals because another home pops up in the same price range that they like better, or because they discover a flaw and get nervous it’ll cost too much to fix,” Redfin Premier agent Crystal Zschirnt said in the report. “I’ve also heard of some buyers backing out because they’re hoping home prices or mortgage rates are going to plummet soon, even though that’s unlikely.” Keep dreaming, folks.

“We wanted flying cars; instead, we got 140 characters,” venture capitalist Peter Thiel, himself an early Facebook investor and thus key financier of the first social media age, quipped in 2013.

Since his remark, the character limit for posts on Twitter — rechristened X under Thiel’s fellow PayPal mafia barone Elon Musk — has climbed to 280 (or 25,000 for paid subscribers). As for cars, they’re still not flying. A US-based startup, backed by Japan’s Toyota, and a freshly capitalized initiative in China could change that as soon as next year.

Shares to the Sky

“Flying car” is a colloquial term best associated with futures imagined by sci-fi filmmakers. But outside the dystopian cityscapes of Blade Runner or The Fifth Element, here on Earth, they go by a much wonkier industry term: electric vertical take-off and landing (eVTOL) craft.

There’s also no futuristic hovering technology — current eVTOLs in development by Santa Cruz-based, Toyota-backed Joby Aviation and Chinese carmaker XPeng get off the ground with old-fashioned propeller and rotor technology. In both cases, that has been more than enough to send their shares into liftoff:

• Joby, which already has a small fleet of air taxis conducting test runs, last week announced plans to expand its California facility to build 24 of its eVTOL craft per year. It also plans to pursue commercialization by seeking certification from the Federal Aviation Administration and expand production to an Ohio facility where it hopes to mass-produce as many as 500 crafts every year. Propping up the effort is 22% shareholder Toyota, which has invested roughly $900 million in the publicly traded startup (shares are up 122% this year).
• And then there’s Xpeng Aeroht, Xpeng’s flying car division, which earlier this month said it secured $250 million in Series B funding to expedite the mass production of its Land Aircraft Carrier, a Cybertruck-resembling all-terrain vehicle with a detachable, helicopter-like air module. Xpeng Aeroht is planning mass production of the vehicle, commencing next year in Guangzhou, with a roughly $280,000 price tag and a facility with a projected annual capacity of 10,000 units. Its parent company’s shares are up 59% this year.

Toyota, meanwhile, has expanded its exposure to the segment as another startup with its backing, Japan-based SkyDrive, obtained initial certification for an eVTOL earlier this year, which could eventually lead to commercialization. The barriers to adoption vary, depending on the market. For example, Xpeng Aeroht produces a smaller eVTOL, the X2, which is technically for sale in Australia, but regulatory uncertainty means using one legally may be at least a year away (and require a pilot’s license).

Dubai’s the Limit: Joby had initially targeted offering commercial passenger services in Dubai, where Xpeng Aeroht tested an eVTOL back in 2022, by the end of this year. That timeline has been bumped to early 2026, seven years after Blade Runner but well ahead of The Fifth Element’s setting in the 23rd century.

These should be the best of times for defense contractors. Last month, NATO members agreed to boost their defense spending target to 5% of GDP by 2035, potentially unleashing hundreds of billions of public-sector dollars into the coffers of military contractors. And earlier this month, President Donald Trump’s One Big Beautiful Bill handed the Pentagon a record $1 trillion budget for 2026, a 17% year-over-year increase.

But the reality for military suppliers is far more complex. A slew of quarterly reports released last week showed that, even with analysts flashing buy recommendations, all it takes is an overrun on one top-secret program to turn an earnings release into a not-so-secret disappointment.

The Defense Dilemma

Like every other industry, the defense sector has been hindered by inflation in recent years. The distinct disadvantage for contractors is the long-term nature of many of their sales, which were negotiated years ago at lower prices and involve deliveries over extensive periods of time. With no easy fix (you can’t shrinkflate an F-35), the Aerospace Industries Association warned last year that defense firms were acting as an inflation “shock absorber” for the Pentagon, which could ultimately make them less inclined to take on risk.

The potential perils of this stress were on full display when America’s largest government contractor reported second-quarter performance:

• Lockheed Martin surprised investors by disclosing $1.6 billion in unexpected charges, most of them ($950 million) related to a classified program with a fixed-price contract signed in 2018. The firm’s income fell 80% year over year, from $1.6 billion to $342 million. Lockheed also hacked $1.5 billion off its 2025 operating profit estimate, bringing its forecast down to $6.6 billion, and saw its shares lose 8% through the week.
• Lockheed was caught in the crosshairs last month when the Pentagon cut an order for F-35s in half, weeks after Boeing won an upset bid over the contractor to replace its F-22 planes. RBC analysts said in a note that Lockheed will need to grow revenue 6.7% in the second half of the year or “elevated compared to peers” to meet its newly downgraded forecast.

About Those Peers: Inflation and price pressures aside, other defense contractors rounded out a solid week. Northrop Grumman raised its annual earnings guidance, citing its Sentinel intercontinental ballistic missile program, which the Pentagon is pouring more money into alongside B-21 stealth bombers. L3Harris, which manufactures rocket motors for Javelin missile systems, beat Wall Street expectations with $5.4 billion in sales. CEO Christopher Kubasik hailed a “clear inflection point, with our strongest top-line growth in six quarters.”