Why Recessions Forge Great CEOs Who Think Beyond Cost-Cutting
04/15/2025
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But the CEOs who make history in downturns aren’t the ones with the deepest cuts
September 27, 2023: According to the U.S. Census Bureau, Sales of constructed home change systems decreased nearly 9% in August. That is the slowest rate since March.
Sales were even 5.8% higher than in August 2022.
The Census estimate is based on signed agreements during the month, and mortgage rates took a sharp jump higher. According to Mortgage News Daily, the average rate on the popular 30-year fixed loan ended in July at 7.04%. By August 22, it was at 7.48%.
“Very stretched affordability suggests demand will be unable to recover in the near term, causing new home sales to drop back from 675,000 annualized in August to 600,000 annualized by the end of the year,” wrote Imogen Pattison, assistant economist at Capital Economics.
The median price of a recently constructed home sold in August was $430,300, a drop of 2% compared to August last year. Homebuilders have been lowering costs and providing more incentives, such as buying down mortgage rates. They had delayed those incentives the previous spring when rates went below 7%, but they are ramping them up again.
One of the nation’s biggest homebuilders, Lennar, recently reported substantial profits, but that was for a quarter where mortgage rates hadn’t hit their highest yet. Lennar Chairman Stuart Miller, however, noted buyer incentives in the release.
“Homebuilders continued to use incentives, including buy-downs, to offset rising interest speeds and more secured capital, which limit affordability,” said Miller.
Homebuilders continue to benefit from the extremely tight supply of existing homes for the deal, but higher interest rates may finally overcome that growth. Builder sentiment dropped into negative territory in September for the first time in seven months, according to the National Association of Home Builders’ monthly survey.
In September, 32% of builders said they cut prices, compared to 25% in August. That’s the largest share of builders reducing costs since December 2022, when 35% were doing so.
The average cost slash was 6%.
“High mortgage rates are taking a toll on builder confidence and consumer market, as a growing number of buyers are electing to defer a home buy until long-term rates move lower,” Robert Dietz, NAHB’s chief economist, said in a release.
But the CEOs who make history in downturns aren’t the ones with the deepest cuts
Companies invest millions in leadership development, yet many of their best executives leave within a few years. Why?
The most successful business leaders don’t just identify gaps in the market; they anticipate future needs before anyone else.
With technological advancements, shifting consumer expectations, and global interconnectedness, the role of business leaders
The leadership landscape is profoundly changing, influenced by technological advancements, shifting workforce expectations, and the need for adaptability in an unpredictable global environment.
In the fast-paced business world, corporate leaders often find themselves at the crossroads of risk and reward, where bold decisions …
But the CEOs who make history in downturns aren’t the ones with the deepest cuts
April 15, 2025: Multiple wildfires burning across northern and central Alberta have triggered large-scale evacuations.
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