Challenges, Compensation, and Leadership Breakthroughs In 2025

John McManus -

[Data visualization below by Maggie Goldstone]

At The Builder’s Daily Focus On Excellence Leadership Forum and Workshop in Austin this past October, Cory Boydston — a board member of firms like Builders FirstSource and the New Home Company and former CFO of Ashton Woods —offered a stark self-assessment that resonated with every leader in the room.

Reflecting on the unrelenting challenges of the housing market, she observed:

It’s lonely. You’re isolated. You’re pushing incredibly hard, and there’s so much at stake. And you feel like you’re on your own."

This sentiment, shared in a room full of industry leaders, encapsulates the dual-edged nature of homebuilding strategic and business culture leadership: the privilege of steering organizations through unprecedented challenges and the solitary burden of critical decision-making.

As U.S. homebuilding heads into 2025, these challenges are framed against an escalating affordability crisis that reshapes every strategic and operational conversation.

The Housing Crisis: A Defining Test for Leadership

The backdrop for Boydston’s reflection is stark. The housing market stands at a precarious juncture, with affordability eroding under the pressure of high borrowing costs, relentless price competition, and systemic supply-side constraints. This week’s Federal Reserve decision to maintain a slower trajectory for reducing borrowing costs has only heightened concerns.

For private builders, the impact is particularly acute:

  • Demand-side pressure: Rising mortgage rates — now influenced more by long-term Treasury yields than Fed actions — continue to price out would-be buyers.
  • Supply-side constraints: Stricter loan covenants and costlier financing for acquisition, development, and construction leave little room for operational missteps.

According to the BTIG/HomeSphere Monthly Homebuilder Survey, builders are experiencing significant challenges. In November, 71% of builders reported year-over-year decreases in sales, a stark contrast to 16% in November 2021. Additionally, 69% of builders reported year-over-year traffic declines, highlighting the industry's demand-side pressures.

Insights from the FTS Compensation Report

In this landscape, the latest FTS Compensation Report provides a critical lens into what leaders and their teams need to thrive. The data points to two priorities that must converge for long-term resilience:

  1. What leaders demand from their teams: Adaptability, innovation, and a focus on operational efficiency.
  2. What teams expect from their leaders: Stability, transparency, and clear purpose.

Here's a direct link to the FTS 2024 report: Click here

Thomas Carpitella, FTS President, contextualizes these findings:

Effective leadership is about bridging the gap. Leaders need to articulate a vision that addresses the immediate pressures while inspiring teams with the promise of meaningful long-term progress."

Opportunities Amidst Adversity

The accompanying data visualization of the FTS report highlights an essential takeaway: Organizations that prioritize their people are better positioned to navigate complexity. Teams equipped with clarity, support, and career pathways perform better and contribute to innovation in solving affordability challenges.

Carpitella adds:

This isn’t just about surviving the storm; it’s about building organizations that thrive because they’ve invested in their people and their purpose."

Boydston’s remarks resonate deeply in a VUCA environment where even seasoned leaders face moments of profound doubt. The affordability crisis and unpredictable economic conditions demand a new level of agility and innovation.

The latest Federal Reserve actions underscore these demands. While policymakers attempt to manage inflation and stabilize financial markets, the reality for homebuilders is sobering:

  • High mortgage rates and soaring land costs make affordability elusive for buyers.
  • Climate-event-driven volatility in home insurance markets adds new risks to long-term planning.
  • Local opposition and zoning delays remain chronic obstacles to increasing housing supply.

These challenges require leadership that balances the practical with the visionary. As noted in the BTIG/HomeSphere Monthly Homebuilder Survey, builders are facing deteriorating conditions due to higher mortgage rates, fear of falling real estate values, and poor consumer confidence.

The Good-News/Bad-News Perspective

The BTIG/HomeSphere Monthly Homebuilder Survey injects a mix of optimism and caution into the conversation.

  • The Bad News: Elevated borrowing costs and competitive pricing tactics by the largest public builders will continue to pressure margins and market share for smaller private builders.
  • The Good News: Demographic fundamentals and pent-up demand for housing remain strong, offering a foundation for growth when conditions stabilize.

In the survey, 51% of respondents believe new contracts will decrease next year from 2024, while 33% believe new contracts will increase, indicating a cautious yet hopeful outlook among builders.

A Path Forward: Leadership That Builds Resilience

So, what do leaders need to prioritize to ensure their organizations not only endure but excel in the current climate? The FTS report identifies several critical areas:

  1. Invest in Talent: Provide reskilling and upskilling opportunities while creating transparent career paths.
  2. Drive Innovation: Foster cross-functional collaboration to develop scalable solutions for affordability and sustainability.
  3. Maintain Transparency: Share clear, measurable goals with teams to build trust and align efforts.

Carpitella’s perspective is particularly poignant:

Leadership in this moment isn’t about perfection — it’s about authenticity, adaptability, and the courage to make the hard calls with empathy."

The Road Ahead

Boydston’s words at The Builder’s Daily summit serve as a reminder of the stakes and the opportunities in front of homebuilding leaders. The isolation she describes is real, but so too is the potential for collective progress when leaders align their vision with the needs of their teams.

This moment demands everything from us," Boydston said, reflecting the mood in the room. "But if we can rise to meet it—if we can embrace the challenges with resilience and resolve—we can emerge stronger, together."

As the FTS report shows, the path forward is steep but not insurmountable. By balancing operational rigor with a commitment to people-first leadership, homebuilding organizations can turn today’s challenges into the foundation for a brighter, more inclusive future.