Today's housing market is a mirror of the times we're living in, new study shows
The American dream of homeownership is feeling increasingly like a fantasy for some.
Gallup's annual housing market survey, released Wednesday, paints a pessimistic picture of the real estate market. Most Americans view current market conditions as decidedly unfavorable, the survey concluded, and they are bracing for further price increases in the coming year.
The responses of more than 1,000 American adults were included in Gallup's sample for its annual Economy and Personal Finance survey. The survey measures housing market perceptions and home-buying intentions across the country.
5 Americans are increasingly pessimistic about the prospect of homeownership.
Getty Images/iStockphoto
5 A home advertises an open house, hoping to attract uncertain buyers.
moodboard – stock.adobe.com
5 Americans across the country reported the cost of homeownership as their greatest barrier.
Mangostar – stock.adobe.com
Roughly one third of respondents reported renting their homes.
Of that cohort, the percentage for that plan to buy a home within five or 10 years was just 53% — the lowest ever recorded by Gallup. Also, 45% of respondents don't expect to buy a home in the foreseeable future. More than half said they expect home prices to increase this year.
The results come at the same time as widespread economic uncertainty and lackluster spring sales reported by the National Association of Realtors. Home sales in March declined by the most since November 2022.
There are plenty of reasons why a renter may not want to become a homeowner — like convenience, bad credit, an unstable job or just simple timing. But the cost of homeownership, including the down payment, is a bigger home-buying barrier for renters than it has been in the past, the survey revealed.
Only 11% of renters cited convenience as their reason for renting, suggesting not renting today is largely an economic choice, rather than a preferential one.
5 For sale signs are piling up across US metros. Home sales nationwide significantly slowed this spring.
Hernan Schmidt – stock.adobe.com
5 High prices, elevated mortgage rates and an uncertain economy are dampening the hopes of prospective homebuyers.
fizkes – stock.adobe.com
Among US adults who currently rent their home, 68% say they do so because they can't afford to buy or do not have enough money for a down payment. When Gallup asked this question in 2013, just 45% gave this reason.
Americans remain broadly skeptical about the housing market, as they have been since 2022, with a majority — 72% — answering that it's a bad time to buy a house. But the Gallup data found real divides in perceptions when sorted by region and politics.
East Coasters, the survey found, are more likely to expect home prices to rise than other regions. Republicans answered the survey with significantly more optimism than their counterparts — 33% of Republicans surveyed said that now is a good time to buy a home, compared to just 18% last year. This cohort's expectations for rising home prices also dropped dramatically, from 69% in 2024 to 48% this year.
Despite declines from their 2022 highs, home prices remain head and shoulders above levels from a decade ago. The financial squeeze of high prices, elevated mortgage rates and an uncertain economy has effectively locked out a segment of Americans from looking forward to homeownership.
Despite this pessimism, a large proportion of Americans — 37% — still believe that real estate is the best long-term investment a person can make.
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Yahoo
34 minutes ago
- Yahoo
Trump tariffs live updates: Trump says he will set unilateral tariff rates within weeks
President Donald Trump told reporters on Wednesday that he would send letters to trading partners in the next week or two setting unilateral tariff rates. 'At a certain point, we're just going to send letters out. And I think you understand that, saying this is the deal, you can take it or leave it,' the president said at the Kennedy Center in Washington. Soon after introducing steep new tariffs that roiled markets, Trump instituted a pause on his most punishing duties that expires July 9. His latest comment, however, only muddies the waters about what could happen next as the deadline approaches. Earlier on Wednesday, Treasury Secretary Scott Bessent told Congress that it is "highly likely" that the tariff pause would be extended for countries that are negotiating with the administration "in good faith." "There are 18 important trading partners — we are working toward deals on those — and it is highly likely that those countries that are ... negotiating in good faith, we will roll the date forward," Bessent said during testimony before the House Ways and Means Committee. On Tuesday, the US and China agreed to a framework and implementation plan to ease tariff and trade tensions. Trump signaled his approval, saying the deal was "done" pending sign-off from him and Chinese President Xi Jinping. Trump and other US officials indicated the deal should resolve issues between the two countries on rare earths and magnets, though reports later indicated China would only loosen restrictions on rare earth mineral exports for a six-month period. Trump also said the US will allow Chinese students in US colleges, a sticking point that had emerged in the weeks following the countries' mid-May deal in Geneva. Trump said the US would impose a total of 55% tariffs on Chinese goods. Yahoo Finance's Ben Werschkul reports, citing a White House official, that Trump arrived at that figure by adding together an array of preexisting duties and not any new tariffs. Meanwhile, though Trump's most sweeping tariffs continue to face legal uncertainty, on Tuesday, the president received a favorable update. A federal appeals court held a decision saying his tariffs can temporarily stay in effect. The US Court of International Trade had blocked their implementation last month, deeming the method used to enact them "unlawful." Read more: What Trump's tariffs mean for the economy and your wallet Here are the latest updates as the policy reverberates around the world. Treasury Secretary Scott Bessent told House lawmakers on Wednesday that the Trump administration may extend the 90-day tariff pause on some countries in order to continue trade negotiations. When asked if Americans should prepare for another "Liberation Day" on July 9, when the tariff pause ends for most countries, Bessent said that the administration may choose to move the deadline on 18 of the most important trading partners, so long as they make an effort to come to the negotiating table. "We are working toward deals on those, and it is highly likely that [for] those countries — or trading blocs, in the case of the EU — who are negotiating in good faith, we will roll the day forward to continue good faith negotiations," Bessent said (see video below). "If someone is not negotiating, then we will not." A recent report on the drastic decline of US ocean imports serves as an example of how President Trump's increased tariffs on China affected supply chains and several industries as ttalks continue. Reuters reports: Read more here. The Treasury Department says that the US government is successfully using tariffs to decrease the budget deficit by more than $30 billion, largely due to increased customs receipts. Reuters reports: Read more here. China will ease curbs on exports of rare earth minerals for six months as part of a new trade understanding with the US, according to The Wall Street Journal. The move could add more uncertainty for American manufacturers, particularly the auto industry, which has been pushing for easier access. The Journal notes that the move gives China leverage down the line if tensions ratchet back up. From the report: In celebrating the agreement early Wednesday, President Trump noted "any necessary rare earths will be supplied, up front, by China." He did not mention any time limit on loosening those restrictions. Treasury Secretary Scott Bessent, in testimony before Congress on Wednesday, painted Wednesday's agreement as an incremental step on the longer road to a more comprehensive trade deal. "A trade deal today or last night was for a specific goal, and it will be a much longer process," he told a House committee. When asked if current US tariff levels on Chinese imports would not change again, Commerce Secretary Howard Lutnick told CNBC, "You can definitely say that." "We're in a great place with China," Lutnick said Wednesday. While the US-China truce framework is awaiting final word from US President Trump and Chinese President Xi Jinping, Lutnick added, "Both sides are really positive." The agreement is largely viewed as reestablishing the "handshake" that US and Chinese officials reached in Geneva last month, as details on a larger trade pact remain scant. Trump posted on social media this morning that the US has imposed 55% tariffs on China, a number that does not include any new tariffs but instead comprises some preexisting tariffs, Trump's fentanyl tariffs, and 10% "Liberation Day" tariffs. Lutnick touted that, as a result of the two-day talks, the US will gain access to rare earths and magnets, while the Chinese delegation sought to remove the US's export controls. He added that the trade deficit remains an ongoing issue, stating, "We're going to examine how China can do more business with us." May's Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis despite investor concerns that President Trump's tariffs would accelerate the pace of price increases. The Consumer Price Index (CPI) increased 0.1% on a monthly basis in May and 2.4% on an annual basis, a slight uptick from April's 2.3% gain. Yahoo Finance's Allie Canal reports: Read more here. I would keep an eye on consumer names off the news of a trade deal with China floated by President Trump this morning (see our prior post below). Seeing upticks premarket in heavily China-exposed retailers such as Nike (NKE), Walmart (WMT), Target (TGT), and Abercrombie & Fitch (ANF). The premarket gains here aren't mind-blowing in part because tariffs appear to still be in place. Trump posted on Truth Social: OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!" A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Treasury Secretary Scott Bessent told House lawmakers on Wednesday that the Trump administration may extend the 90-day tariff pause on some countries in order to continue trade negotiations. When asked if Americans should prepare for another "Liberation Day" on July 9, when the tariff pause ends for most countries, Bessent said that the administration may choose to move the deadline on 18 of the most important trading partners, so long as they make an effort to come to the negotiating table. "We are working toward deals on those, and it is highly likely that [for] those countries — or trading blocs, in the case of the EU — who are negotiating in good faith, we will roll the day forward to continue good faith negotiations," Bessent said (see video below). "If someone is not negotiating, then we will not." A recent report on the drastic decline of US ocean imports serves as an example of how President Trump's increased tariffs on China affected supply chains and several industries as ttalks continue. Reuters reports: Read more here. The Treasury Department says that the US government is successfully using tariffs to decrease the budget deficit by more than $30 billion, largely due to increased customs receipts. Reuters reports: Read more here. China will ease curbs on exports of rare earth minerals for six months as part of a new trade understanding with the US, according to The Wall Street Journal. The move could add more uncertainty for American manufacturers, particularly the auto industry, which has been pushing for easier access. The Journal notes that the move gives China leverage down the line if tensions ratchet back up. From the report: In celebrating the agreement early Wednesday, President Trump noted "any necessary rare earths will be supplied, up front, by China." He did not mention any time limit on loosening those restrictions. Treasury Secretary Scott Bessent, in testimony before Congress on Wednesday, painted Wednesday's agreement as an incremental step on the longer road to a more comprehensive trade deal. "A trade deal today or last night was for a specific goal, and it will be a much longer process," he told a House committee. When asked if current US tariff levels on Chinese imports would not change again, Commerce Secretary Howard Lutnick told CNBC, "You can definitely say that." "We're in a great place with China," Lutnick said Wednesday. While the US-China truce framework is awaiting final word from US President Trump and Chinese President Xi Jinping, Lutnick added, "Both sides are really positive." The agreement is largely viewed as reestablishing the "handshake" that US and Chinese officials reached in Geneva last month, as details on a larger trade pact remain scant. Trump posted on social media this morning that the US has imposed 55% tariffs on China, a number that does not include any new tariffs but instead comprises some preexisting tariffs, Trump's fentanyl tariffs, and 10% "Liberation Day" tariffs. Lutnick touted that, as a result of the two-day talks, the US will gain access to rare earths and magnets, while the Chinese delegation sought to remove the US's export controls. He added that the trade deficit remains an ongoing issue, stating, "We're going to examine how China can do more business with us." May's Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis despite investor concerns that President Trump's tariffs would accelerate the pace of price increases. The Consumer Price Index (CPI) increased 0.1% on a monthly basis in May and 2.4% on an annual basis, a slight uptick from April's 2.3% gain. Yahoo Finance's Allie Canal reports: Read more here. I would keep an eye on consumer names off the news of a trade deal with China floated by President Trump this morning (see our prior post below). Seeing upticks premarket in heavily China-exposed retailers such as Nike (NKE), Walmart (WMT), Target (TGT), and Abercrombie & Fitch (ANF). The premarket gains here aren't mind-blowing in part because tariffs appear to still be in place. Trump posted on Truth Social: OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!" A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Sign in to access your portfolio
San Francisco Chronicle
38 minutes ago
- San Francisco Chronicle
Iowa governor rejects GOP bill to increase regulations of Summit's carbon dioxide pipeline
DES MOINES, Iowa (AP) — Iowa Gov. Kim Reynolds on Wednesday rejected a bill that could have introduced more complications for a massive carbon-capture pipeline project routed across several Midwestern states, issuing a rare veto in the Republican-controlled statehouse. The legislation was designed by Iowa House Republicans to increase regulations of Summit Carbon Solutions' estimated $8.9 billion, 2,500-mile (4,023-kilometer) project that cuts across Iowa and already has an approved permit in the state. But the bill provoked loud opposition from members of Iowa's powerful ethanol industry, which argued the project is essential for Iowa's agricultural dominance, for farmers and for construction jobs. And it exposed a rift within the party over how to protect property rights. 'While I shared the bill's goal of protecting landowners, good policy should draw clear, careful lines. This bill doesn't,' said Reynolds, a Republican, in the explanation of her veto. 'It combines valid concerns with vague legal standards and sweeping mandates that reach far beyond their intended targets.' Despite her veto, Reynolds said she was 'committed to working with the legislature to strengthen landowner protections, modernize permitting, and respect private property.' Iowa state Rep. Bobby Kaufmann, a Republican who supported the bill in the House, said Wednesday that her commitment is too little, too late. 'If she was willing to work with us on this, where in the world has she been the last three years?' Kaufmann said. 'She is clearly not siding with the constitutional rights of landowners but rather she's siding with special interests.' Summit has said it has invested nearly $175 million to enter into voluntary agreements with landowners in Iowa and more than $1 billion on the project overall. In a statement, Summit thanked the governor for a thoughtful review of the bill and said their goal is to proceed with voluntary agreements with landowners. Even with the relief from Reynolds' veto, Summit will likely have to readjust plans after South Dakota's governor signed a ban on the use of eminent domain — the government seizure of private property with compensation — to acquire land for carbon dioxide pipelines. Summit's permit application was also rejected in South Dakota. The project has permit approvals in Iowa, Minnesota and North Dakota but faces various court challenges. The Iowa bill would have prohibited the renewal of permits for a carbon dioxide pipeline, limited the use of such a pipeline to 25 years and significantly increased the insurance coverage requirements for the pipeline company. Those provisions would likely have made it less financially feasible for a company to build a carbon dioxide pipeline. 'We look forward to continued discussions with state leaders as we advance this important project,' Summit said Wednesday. 'At a time when farmers are facing increasing pressures, this project opens the door to new markets and helps strengthen America's energy dominance for the long term.' Rift in Republican-controlled statehouse Republican House Speaker Pat Grassley said after Reynolds' veto that he would pursue a special session to vote on an override, saying in a statement that the veto 'is a major setback for Iowa.' The Iowa Constitution states that a request for special session from two-thirds of both chambers, or the governor, can bring lawmakers back to Des Moines. Two-thirds of both chambers would need to vote for an override for the bill to become law without the governor's approval. 'We will not stop fighting and stand firm on our commitment until landowners' in Iowa are protected against Eminent Domain for private gain,' Grassley said. Senate Majority Leader Jack Whitver suggested that would be unlikely in his chamber. Thirteen Republican senators had joined with 14 Democrats in voting in favor of the bill, but 21 Republicans and one Democrat voted against it. 'Based on the votes on that bill in the Iowa Senate, a significant majority of our caucus supports a better policy to protect landowner rights. I expect that majority of our caucus would not be interested in any attempt to override her veto,' he said. As the legislative session wound down, a dozen Republican senators insisted their leaders bring the House-approved bill to the floor for a vote after several years of inaction. The stalemate ended in a long and divisive debate among the Iowa Senate's Republican supermajority, with senators openly criticizing one another and exposing the closed-door discussions that got them there. Summit's project and its critics The Summit pipeline was proposed to carry carbon emissions from ethanol plants in Iowa, Minnesota, Nebraska, North Dakota and South Dakota to be stored underground permanently in North Dakota. By lowering carbon emissions from the plants, the pipeline would lower their carbon intensity scores and make them more competitive in the renewable fuels market. The project would also allow ethanol producers and Summit to tap into federal tax credits. The pipeline's many critics have for years begged lawmakers for action. They accuse Summit of stepping on their property rights and downplaying the safety risks of building the pipeline alongside family homes, near schools and across ranches. Lee Enterprises and The Associated Press reviewed hundreds of cases that reveal the great legal lengths the company went to to get the project built. In South Dakota, in particular, a slew of eminent domain legal actions to obtain land sparked a groundswell of opposition that was closely watched by lawmakers in Iowa as well. A group of landowners released a statement Wednesday calling the veto a slap in the face. 'Big money, greed & self interest won the day,' said Jan Norris, a landowner in southwest Iowa whose neighbor is in the pipeline's route. 'Our property rights are for sale to the highest bidder.'
Yahoo
40 minutes ago
- Yahoo
Joby Aviation Stock (JOBY) Takes Flight Upon Donald Trump's Executive Order
On Friday, June 6th, President Trump signed an Executive Order to 'unleash American drone dominance,' which included directing the Transportation Department to develop an Electric Vertical Takeoff and Landing (eVTOL) program to accelerate eVTOL operations in the U.S. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Aside from confirming the specter of space-age technology making its way onto American streets, as foreshadowed by content creators for generations, leading electric aircraft manufacturer Joby Aviation (JOBY) stands well-positioned to capitalize fully on the evolving opportunity. The company has been making headlines with major partnership announcements and impressive funding rounds. After analyzing recent developments and financial performance, I am bullish on the space and Joby Aviation's potential. Joby Aviation is playing a leading role in the transformation of the aviation industry through the development of electric vertical takeoff and landing (eVTOL) aircraft. The global eVTOL market was valued at approximately $760 million in 2024 and is projected to grow significantly, reaching an estimated $17.34 billion by 2035. Beyond aircraft manufacturing, Joby is building a comprehensive ecosystem that includes pilot training initiatives and proprietary dispatch software. This vertically integrated approach may offer substantial competitive advantages if executed effectively. While the company operates in a competitive landscape with peers such as Archer Aviation (ACHR) and EHang (EH), strategic partnerships—including a manufacturing collaboration with Toyota and operational agreements with Delta Air Lines—enhance its credibility. Additionally, contracts with the U.S. Department of Defense further diversify potential revenue streams and support the broader validation of its technology across both commercial and government sectors. Joby has been on a notable run lately, with shares climbing over 22% in the past month, thanks to several major announcements that have investors excited. One of the most significant catalysts came in May when Toyota made a substantial $250 million investment in the company, becoming Joby's largest shareholder in the process. Toyota's involvement brings decades of production expertise and operational know-how that could prove invaluable as Joby scales from prototype to mass production. Following that, Joby signed a memorandum of understanding with Saudi Arabia's Abdul Latif Jameel to explore a potentially massive $1 billion distribution deal. If finalized, this could represent a significant international expansion opportunity, with up to 200 Joby aircraft potentially deployed across Saudi Arabia. Perhaps most importantly for long-term prospects, Joby has been making steady progress through the complex Federal Aviation Administration certification process. The company recently advanced to the final phase of FAA type certification. It became the first electric vertical takeoff and landing (eVTOL) company to conduct routine pilot-on-board transition flights. This regulatory progress is crucial because it directly impacts when Joby can begin commercial operations and start generating meaningful revenue. The recent White House directive may be enough to help get these birds airborne even sooner. Joby's first-quarter net loss narrowed to $82 million from $95 million in the prior year, and the company beat earnings expectations by $0.07 per share. While cash burn continues, the trajectory suggests management is making progress on cost control as the company approaches its commercial launch. Further, its robust balance sheet is a key selling point. The company ended the first quarter of 2025 with $813 million in cash and short-term investments. The recent Toyota investment, combined with an additional $500 million commitment from the automaker, significantly strengthens this position. This financial cushion is particularly important given that Joby is still in the pre-revenue phase of its development. The company is projecting a cash burn of $500 million to $540 million in 2025, highlighting the significant capital requirements of introducing an entirely new form of transportation to the market. The current war chest provides roughly 1.5 years of operational runway at current spending levels. Even better, Joby carries zero debt, giving it tremendous financial flexibility as it works toward commercialization. The market opportunity, while potentially massive, remains largely theoretical. Consumer acceptance of air taxi services remains unproven, and regulatory frameworks for urban air mobility are still evolving. Yet, analysts following the company remain cautiously optimistic. Joby Aviation is rated a Moderate Buy overall, based on the most recent recommendations of seven analysts. Their 12-month average price target for JOBY stock is $8.86, representing a 4% downside from current levels over the next 12 months. However, various analysts are likely to shift their positions towards a more bullish stance once the full impact of Donald Trump's executive order is assimilated by market participants. Cantor analyst Andres Sheppard remains optimistic, recently reiterating an Overweight rating for JOBY stock with a $9 price target. He notes the company's strong liquidity and strategic partnerships with Toyota, Delta Air Lines, and the Department of Defense, which position JOBY as a leading contender in commercializing eVTOL technology. H.C. Wainwright's Amit Dayal shares a similar positive outlook, particularly following Toyota's significant $250 million investment aimed at supporting Joby's development efforts. Dayal anticipates a pivotal year in 2025 for the eVTOL industry, with milestones expected in certifications and piloted flights. The expectation is for Joby to produce 25–30 eVTOL units by the end of next year, with substantial revenue growth projected, reaching over $1 billion by 2029. Dayal also maintains a Buy rating with a $9 price target. Joby Aviation is a compelling investment opportunity in an embryonic industry poised to commercialize urban air transportation. The promise of flying cars, envisioned by countless visionaries over the past 100 years, is now becoming a reality, albeit gradually. JOBY has secured impressive partnerships, maintains a strong balance sheet, and is making meaningful progress toward commercialization. The company is poised to transition from an ambitious startup to a commercial aviation company. Key milestones to watch include progress on FAA certification, formalization of the Saudi Arabia partnership, and updates on manufacturing scale-up. The future of flight is here, and I am pretty bullish on the eVTOL space and the current market leaders, such as Joby, who are making it a reality. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
