Tri Pointe Homes (TPH) 24 Oct 242024 Q3 Earnings call transcript

Greetings, and welcome to Tri Pointe's Third Quarter 2024 Earnings Conference Call.

[Operator Instructions]

As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, David Lee. Thank you.

begin. may You

results, welcome under Earlier and results Pointe Earnings the detailing Homes the available deck Good www.tripointehomes.com Events at morning, to and the Call. through these Documents XXXX. this quarter link financial a company Conference slide third are and morning, Investors of Tri including the released for tab. its Presentations

statements risks made like concerning on performance, statements begins, call everyone undertakes materially remind factors the that are historical no these forward-looking operating duty of by filings. to facts, financial could differ the I uncertainties not future would in including call, and are required to SEC this that to certain company's update and results discussion Before and which detailed Except involve are statements statements. and company uncertainties. cause the other that forward-looking as risks actual A law,

discussed and the Keeler, comparable Executive website be call non-GAAP are Chief the Operating of this Glenn company's to on Doug reconciliations its in and Mamet, Chief through and Tom Bauer, most the Chief the accessed Marketing filings. Chief SEC financial Officer; Mitchell, the call Linda Additionally, and Executive Hosting Officer; today can measures Tri measures GAAP Financial President company's company's Vice Officer. President Officer; the company's Pointe's

With that, I to will call the now turn Doug. over

morning on call. today's everyone good to David, and Thank you,

$X.X a that you in results and X,XXX the deliveries Tri our XX% report sales financial we the to the results, outlook homes, As in initiatives $XXX,XXX revenue and I'm fourth again achieved a our market delivered update has for in the to the quarter increase sales excellent to home XXXX. quarter. full pleased on growth quarter price billion. conditions. and review our also for third current average X% increase Pointe once XX% We growth year We'll to share discuss

reporting balanced with segment and deliveries were our revenues. both achieving The across pricing each in improvements volume and markets well in gains

improvement sales during the demand was period Our year, for point season. last the compared to the experienced XXX basis power strong selling spring home quarter same we the margin gross and pricing XX.X%, a reflecting

for margin Selling, expansion XX%. XX.X% $X.XX, XXX XX% for growth, resulting was general the increased leverage revenue improvement gained pretax a increase sales million Diluted point basis of the from revenue and year. SG&A expenses revenues. largely quarter, Collectively, year-over-year, and additional growth year-over-year of previous the leverage drove quarter, home substantial $XXX a over earnings of was operating administrative per earnings share through the reflecting

these year-to-date equity $XXX quarter cash to Book to addition prior strong at generated $XX.XX, for earnings, In we million period. for the million average return our was and year, the $XXX on increase ended share XX-month X-month XX% the the quarter per operating flow a the XX% value of compared and during period.

Turning patterns achieved to of in X.X% for line with a normalized consistent absorption were monthly historical results. Demand quarter. seasonal with orders. trends rate We the

in markets on stability, Austin well offset are supply although we in the and weakness geographic Housing footprint allowing increased us diversified and provides slowed, others. stronger has to capitalize Our have market. Dallas absorptions to relative and performing

Orange as Tri Washington, Pointe supply a Inland Houston the in growth for in quarter Empire demand markets County D.C. area. with California, job Colorado Metro increase strong the market headwinds. slowdown seasonally in to and a Arizona, and demonstrated regional challenging continues an have serving this be were and Conversely,

the the So some severe mortgage events the continued and hesitation October, geopolitical upcoming rates, volatility among macro in such far renewed events introduced as uncertainties election, weather in has buyers.

create hesitation such community-by-community that basis buyer feel as will encourage is studio as price we We home with targeted into buydowns pace only balance rate and credits XXXX. and shoppers. to demand move We interest a incentives pent-up temporary this continue and on design

we about decrease the the data rates the market are forecasting average conditions improving are into high rates indicators, positive with year upcoming low stronger-than-anticipated Xs in from and XXXX, modestly optimistic housing next experts we job mortgage and We X% affordability. stronger will anticipate As many head spring inflation cooling range, selling season. to

factor. there demand have is rates pent-up believe who be waiting from on a sidelines lower will and We homebuyers the been moderately motivating

of are Our are Pointe our In be mortgage millennials Connect, buyer homebuyers. household Tri profile our strong. average FICO at ratios Tri buyers first-time buyers XX%, company, Gen Z XX% average and loan-to-value of and income with XX% $XXX,XXX. and ratios Over Pointe scores our XX% continues XXX, backlog debt-to-income have of to of

third Connect Pointe our demonstrating Tri the integrated Our mortgage XX%, at quarter capture platform. of the robust rate remained for strength

remains favorable with housing growing outlook and supported housing Our Z a and cohort between positive market by millennial of fundamentals a mismatch demographics, demand. supply solid Gen buyers long-term and structural

some the next undersupplied, estimates million million and that are homes state new over remains decade. Housing needs and XX between new home XX

million we X.X annually. While producing homes industry, an only as are

Regarding months retired our capital ended and $XX XX, million for XXXX, repurchased for we allocation X September million. strategy, shares the X.X

our price its in a XXXX. repurchased to discount our XX% count the $XX.XX, at XX current book of we've reduced our peak share share repurchase by of XX% shares program, Furthermore, per representing inception we've of $XX.XX. value million Since from an share average

all-time we've driven expanded to debt-to-capital to enter markets new our our market and executing this program, addition In low. an ratio repurchase scale,

balance returns with growth. Our excellent company is sheet future continue the the shape, for flexibility while delivering positioning shareholder in strong us to providing

long-term call, on presence As we strength. markets, earnings both growth we in our in our expanding ourselves established and mentioned remain last focused position for

and a creating market Our and opportunities. navigate us new diversified on geographically enabling strategic are capitalize fluctuations initiatives resilient to more company,

the markets, call on X update Utah, Carolinas. progress let over and Glenn, provide an our turn in to Coastal expansion I me Before the Orlando

market progressing to We've employment, schools. Our submarkets entry is close and in well. targeted amenities Utah strong core

far, first community totaling mid-XXXX. the lots expecting So control sales XXX to in X communities we with launch

entry premium move through diversified We from are XXX-plus second another for level product up. also negotiating contracts with lots

positioned pipeline potential. market's on the are strong team, and capitalize to a land With an well we experienced

Orlando we members leadership are divisions premium Coastal strategy, an significant and we the responded and operational expand will developers making we have our Carolina our key and progress as regions. answer welcomed need unmet product team Our positively third which in design to presence. In these and believe quarter,

expect established D.C. our and opportunities underwriting We in markets resources first land are in and promising divisions to early Metro leveraging homes and highly our we're sell new and XXXX. Charlotte expertise These from remain area. the nearby

drive ground very Pointe divisions. to positioned XXXX Homes this close both solid will results Orlando and the for conclusion, in poised well XXXX. Carolina and share to Tri optimistic In a We're in Coastal that playbook running hit the is

seize to and established and driving our expansion by leverage opportunities remain in undersupply strengths supported fundamentals persistent both Housing markets. demand. homes continue a of market We strong,

growth returns coupled outlook our and favorable confidence. profitability, strategic Our reinforces focus with industry shareholder a on

our delivering We annually creating for remain increasing value Glenn. share I returns turn sustained With dedicated to to will book value while Glenn? strong to over the now XX% and that, per XX% shareholders. by call

some good full with Doug, our finish like and third to and quarter the for for and fourth for highlight morning. Thanks, results quarter of and the outlook year remarks our XXXX. I'd then expectations my

high strong produced end X,XXX to close delivered for were third spec The the which financial during We above sell ability was homes, quarter. quarter our due in the backlog Gross homes and remain midpoint to that the Based of company. our guidance margins for on margins expect quarter, deliver and at mix quarter, right our the for quarter. at approximately the guidance. of specs could of our XX.X% we fourth consistent the the XX.X% to results

and XX.X%, guide of in the SG&A in at revenue deliveries our better gained came additional leverage increase than percent expense in sales due through revenue as resulting home to quarter. the a largely the

diluted X,XXX XX% pace ago. quarter new and were community were X.X was on for on to the an absorption X.X% third of our XX% homes. on Finally, third of during homes a home per $X.XX were a Net orders in month. spec quarter increase orders the quarter EPS per $X.XX, approximately Incentives the compared orders year

rate orders homes $X.X the with at low the backlog approximately revenues. cancellation quarter of remained on in and future Our X,XXX ended gross billion during representing we XX%, quarter

with in expect and end year opened to communities. communities. active active estimated of of fourth selling closed We XX, closing we communities. ending in the our to in communities to XXX on the mix X the and XXX opening selling range new the communities quarter quarter, XXX Turning Based

to market third continue land quarter the ended We total development. approximately quarter, land be and controlled. land active lots XX% during in the owned XX,XXX the in and investing We XX% $XXX with million with

on XXX Our by XXXX to XXX the the land communities teams we market and other a building schools have and to end to amenities. a done job close grow active range currently to we land to on strong XXXX. locations, pipeline a A of our great expect selling control, communities range job in active selling own of centers of end communities what by access utilizing focusing and of strategy, XXX XXX to and Based great to core a

Looking at $XXX the and under billion and unsecured revolving our the with consisting capital of balance spend. We facility. million of credit sheet approximately million $XXX quarter available liquidity of $X.X cash ended

Our our was debt homebuilding debt the to homebuilding was net ratio capital net and end X% ratio capital XX.X% quarter. to to

million, for During spend dollar of authorization. our under an with XXX,XXX $XXX repurchased aggregate quarter, leaving the current we available $X.X million shares third us

quarter. million as We the our are continue in we part and $XX targeting a repurchases to approximately to strategy, during share allocation capital valuable fourth of view repurchase stock

full and XXXX. like outlook our for I'd Now summarize for year the fourth quarter to

For between quarter, and delivering X,XXX average the and $XXX,XXX fourth $XXX,XXX. price we between X,XXX an homes anticipate sales at

percentage XX.X%, range anticipate We the to expense be of expect range the SG&A to XX.X% to gross our and be XX% homebuilding XX.X%. we ratio in to of margin in

effective be Lastly, our the approximately we quarter for estimate XX%. to tax fourth rate

approximately we full and price between homes the sales of average X,XXX with year, $XXX,XXX. X,XXX For anticipate an delivering

homebuilding approximately year anticipate SG&A approximately our gross to expense expect XX.X%. and to we our ratio be We margin be full XX.X%

to approximately for estimate tax call full the now I our that, XX.X%. we turn the for closing to remarks. back With over be Lastly, effective some Doug year will rate

Thanks, Glenn.

to mission and want we and values. Pointe up, team a I the commitment work our hard to As continued Tri your moment to take for wrap thank

strategy, the that, strong opportunities about in another coupled right front the the Operator? and our make most industry forward with for to to long-term the are have up essential outlook plan us. and strong remain efforts of solid questions. in it to quarter we're move team we'll instrumental for the results We Your company. excited to success, open our and delivering of of a With

Instructions] [Operator

is first from ISI. Evercore from Stephen Our question Kim

expectations. about community sort count Appreciate to volume color. of implied that and all wanted with the your I ask

communities. So Glenn, previously -- XXX I year the you that you XXX to end with think said, expect to

I about XXX. been guiding previously had think closer you something to

if were strong. So it's a like not communities, particularly XX XX sales wrong. I'm And me there to of correct shortfall XQ

you think community And guide I going implied XX%, the made had about for of were count you of why wondering talking is sort year. year, kind because I'm next XXX lower. So that also then next comments year-end,

with So downside of I'm why also reasons the wondering the risk XXX are the Or XXX this year, year? at to provide XXX there end case? would next be not that that to does

Good Glenn. question. it's Stephen,

of did close previous We expected. so Our that going out to earlier of of guidance XXX, there. communities a things than was XXX handful on couple a

a decision it, So to role the into community move also some year. that next spring strategic in the we made into QX played but selling openings season count

And so on XXX active 'XX XXXX, XXX we the communities. to to end in then guidance XXX that And the communities. we difference for causing that's XXX for at XXXX, expect what's about And gave selling to XXXX. call

So on the call. we that's guidance gave the

I that. missed I you. that. appreciate Got

just next first for of question that like So your be a why if sort I into just reduce down would guess you're I the it it spring, outlook that cascade that is deferring guess like next it's Why necessarily year? if would coming year. of is, of kind my my out? pushing sort question. for would

at We Yes. And focusing PT in to as game. long-term very growing our earnings. look a approach pretax this measured a business, on take we

looked communities make the back going at the what's going we year. and So half more shareholders year those to next at money said, of the for

we our -- measured our way and the just to run business that's philosophy. that's that's business the approach So

communities like, about talking these And your things I Got previously I been to like think, that. of mix think and when what dropping Glenn, had you. because going are you look ASP about then

we haven't seen did We but quite in ASP there see ASP. on the that order the something book, closings

a to So on I'm little be coming. to Are assuming also communities hotter likely basis? absorption run it's designed an these

give how be to run of are absorptions replacing? like the designed could In much other that than typically run? you if they at sense they're higher words, for geared communities And a to higher they so, us would kind

that Carolinas, we full and when to target is more necessarily around wouldn't I it The absorption you out year, generally things X year from little X, going pure mix I the in say wouldn't but referenced an depends bit that run change. and it's Texas, was was the X. X that X I more to community, mix. and decline that, weighted they're communities. to that, just is say quarter on for We maybe slight the hotter. a our And pace. going types heavier think underwrite to mix I to of to to mean average next order tends X those tend a is to ASP But to is our just like type the that absorption of target just like

from is Our next Wolfe from question Trevor [indiscernible] Research.

And demand along? picked of then throughout you cadence as the can rates in just October. mentioned lower? quarter see hesitation Did some move Doug, the as quarter about First, moved you here up talk demand you the

reasons talk election sense are to the with You operators large the And listed seen your headwind occurring. equally that here more reaction we've you few a be as other those in mentioned you that like of rates might a last of is primarily here the few a higher recently. why impacts weeks? some Or over your the field, creating that

adjust been a macro the of really in And That's October, going week. this primarily some but label for our for we this our Yes. buyer some Linda election, the early especially absorption long too. can it divisions doing I've to seen good actually to plan that, and She's actually a hesitation, calls I And event. operating own with would been issues, our question. -- years. through the about time. I've this and company for ran talk And

we're hesitation are the field. I in an So issue. would that Rates the bigger that's say seeing not

It's selling around also season, is have kind the the with to would demand into different still on and played hesitation. pull bullish that we're about I people the community year. seeing very We goal strong. And hence we across get next fence, going the the ability spring just our I'm people line. why levers openings to sitting say really reason of the

a I smaller builder. we're mean

the the we it following into year. our to profitable could or the be business make So ability have most year going business any

and try not a lot we're a little the be smart what's happen in And It so think there's selling buyers over sitting confidence this there. lot And rates. of spring getting we of to a about little season. going demand to gave frankly, it's election. about a just just And

Trevor, it's Tom.

up the pretty the Just of definitely to during follow relative cadence was bit to rates orders coming July up the August. month of down. perceiving September people were consistent be quarter. picked to your question little Then was as slowest about August quarter. a with

strong. we're But is as how kind we're that with So October macro be And confident Doug demand it's building of pent-up it's as to into that's spring all heading out mentioned, been choppy there. the season issues going the we're gone. and highly again,

like price. it quarter, makes think made I and there, think pace kind Doug, going the you a about lot your kind which profitability to the you be environment. solid color is is of margin of alluding That of guess and and up XQ piggybacking a Gross pretty roughly choice was of a I good comment in Okay. current flat, in outcome And to I were sense. looks

guess, pace there I things? alluding you're current and further about, what to So how X talk your the balancing can environment, decision about those on you were in you price

XX.X% as the to steady Well, be illustrating we roughly. think, balancing at, Glenn, Margin and XXXX. I land pace price. approach took again, we're we an for And always that will

team. per a EPS just goal a multiples great doing. and a to year. growing and share a So per what XX% got company, share for -- value book solid grow our builder, very adjust growing our smaller is on things market to we're book we're we're XX% focused Again, here, We other and value Trevor, that's that let and got

importantly, premium to we be successful. most into new these markets that enter And are brand got very we've solid that going very, very can a

So the good I the looking for think margins year. of end are

from is Associates. & from Ratner Zelman question Alan Our next

following question Doug, on maybe gross just prior the margin since where off. left topic that's the

and -- about I'm were I on think correct think me incentives X.X% I if orders wrong, quarter. of price So said this you

up about that's think XQ. in X.X% from I

gross in guide there early curious bump with cost are up, Or just ticked XQ, incentives impacting So should about offsets though the either margin for think flattish we more on the or margin mix? incentives even that 'XX. there side

slightly take the but Incentives order I'll one. third lower quarter, elevated that were it in base. on Glenn. was it's a Alan,

that, backlog than in lower overall still incentives Our obviously. are

enough margin fourth QX And that margins to driving the of that really lot good quarter. wasn't and margin driving so and that's to-be-built that's in was It backlog, what really what's there's a that because margin. move

it. Got

you're Okay. not That's it's the 'XX think year. if guidance into helpful. giving early. But Obviously, with season, you're like and setup homes heading yet spring minus gave I specific I'm of you to sounds could curious specific you're you know plus And then under backlog but it just enter going I if the probably XX%. the kind we year on have through down construction. that recall selling pretty bullish the or the don't

have what full under difficult But to still next backlog you number to more picture given know year, entering like pivot through set community I do grow a is year? have based telling the year. from more growth maybe bit what from count look grow that perspective based does to you production, the your up on unit Or a going it on make a the s**. that perspective backlog because of enough necessarily So isn't closings to opportunity feel the the like to you you

you to guidance, the community -- the back start year we selling year, give this Good coming believe but without spring like to of the started we lower year and lower we no, do count than aren't half with Alan, in of giving season. is into question, going And us the backlog last said, make guidance because you're year. trying

a So the that somewhat into to year present amount challenge coming good under with grow construction. -- of deliveries. are we does we do But a

about have and homes that X,XXX we So right started now are unsold.

X,XXX So ramp XXX have year then And going going the but it's we pretty that our have do XXX, the count our year. community over quarter. and going specs is to to into to backlog ratably next we fourth be to about

towards weighted there. front kind heavily So you it's of or give the back half just some not the to color half,

Tom. Alan, Yes, it's

on to spring little good really We pretty do to into that bit. feel that inventory spec a season. Just tag relative moving our selling

So on a we as depend that season really right fortunate spec entering have the that, is. and season we that think the how units on lot strong selling be if will we spring it it's as under is, react just to ability to with Obviously, have into but now. capitalize robust construction

spec, And a does could. how X,XXX Great. I year one, homes compare if last ago? construction that under That to

I'd have at... to look

were very Last so X,XXX very essentially the we year, similar. It's in similar. quarter, at third

Our RBC next Capital from Mike Dahl Markets. question is from

interesting a decision beg Glenn, of openings. it's of couple move kind terms of in And I strategic Tom, community to Doug, the the questions.

managing The and potentially just is meaningful of pace be back first I be as around you should and shake kind kind much one open Or implications we community, strategic something about looking going that do view you're differently let it about than we is, there? XQ how given going where decision quarter think Are thinking just on that quarter as pull we other of to if at a the to how in better? incentives the spring your should really, exited. does out and fourth pace out how you're your when making incentives

end year, homes call the sell Doug, at third some mean, this quarter, I to for beginning going to a you're division generally closing speaking, their Yes, quarter is of going this the that have you're have fourth -- plan. meet probably Mike. to of to the to in

a the a the that selling be that expect would fourth incentives look going into of little ] will that as on tagged quarter. the buyer be would opening. And we macro bit And we lot bit incentives [ lower I season, there's those with So the higher spring hesitation, communities into mentioned as new we're side. a

that's we how So of strategically at kind look it.

to on just highlight is, how Sorry, was said. Mike, as match going approach we focused to we our are to and moving completed just just add, think obviously, to that inventory our about Doug it I plan,

community we look by as for vary incentives, on have inventory there at what do out available ready So community we they move-ins. depending

then incentives we're we're continuing mix. auctions inventory it's costs and to buyer options relative about and utilized and focused closing towards And XX-XX upgrades. to And So on individual primarily a turn our want being to are demographics finance that.

year the it utilizing outlook we incentives. with somewhat decreasing So half, agree will through with back but that I is our plans fluid, is choppy increased would overall, but incentives, meet for Doug slightly next

Okay. Got it.

today, what's keep through So targets. hit on to ground reasonable the you'll moving

In kind of these well? little too of as some And I the so some much is is a have kind might of in it facing the well of terms hesitancy kind openings. in how a guess leaned also spec a to dynamics as markets, ground the where builders some buyers, terms inventory hold these much -- competitive clearly, to of on you're off of "hey, response of of a on also we there's lot just response into

be you could. would my if that follow-up there, question So

really, what very premium that and as offer to on radar has down for our screen a competition, by a everybody. relative that's been play homebuilders good that's a Mike, we're at in strong much really amenity, to work. we Yes. break school bigger the look market market. And And build you bigger when because we incentive the question. the locations, But game. share will the opportunity, closer absorption Austin is brand of closer a getting

aren't you a better very to share the brand market we that, even offer premium -- getting really to us. want driving we're I market. too. Austin that market our in choppy, opportunity. And if what's than larger It's of Linda, that's add know, an So typically builders in don't

X it is right look that market so average well. weighted you market currently think more have that often mean supply when I is Tri in I home a locations we product. now months competition supply variable across that for you've with or in of is No, footprint that California, markets does have the very inventory Washington, our is resale our markets of Pointe's And all our under in had the the side. there the Southern on those by of new premium some market really basis, from little like

Okay. about should and And of Or sorry of But where another the one think aligning this out then you you some to on we harp opening squeeze openings? mix is delayed in. dynamics? the how then those regional with would characterize those pushed regional

that have me, don't I have in Glenn, I'd of you unless get front do Mike. it? probably

also to up season major impact didn't little selling like a impact I bit going talking obviously. making a in in we that the November we'll community about in a not orders going able too be, a going QX, the a We're big strong, huge of think might right? or to any It's but make not deal the fourth to the was quarter. to get with And now out and aligned be that is pushouts. to we of open for So February, it's January if Yes. open be maybe some spring that, of we end that's potentially think

deal big that ... not to it's So

slower it's markets. markets, these at some communities weighted stronger spread as not noted out It's actually some that. of to add the of the in would of -- we in, let's the in say, remarks, our I all new some And

openings December it's said, January. like the period Glenn to So November, from adjusting of holiday just late

recognize the shift think impact thing on to I relative important slight openings, that not timing next in that to deliveries most of have for is any it year. relative will to

from is BTIG. question Carl next Reichardt Our from

one quarter. next quick on Glenn, just for guide SG&A a the the

says. even your with at openings revenue. in Is SG&A? costs And sequentially little in think the you any related better you'll additional bit the to leverage a midpoint, than what quarter would anything Is or spend? be assume community it got next special up just in guide million associated $XXX I that there

there a to And Yes. Good question. range there, XX.X is XX.X.

up also So of in but just hiring is fourth are the that those some new and of we divisions timing people. ramping quarter, start-up X more spend

just ends bit shaking so see a how That's out little is in quarter, but bit the in up fourth little there impactful, we'll the that a And of of but that not noise fourth that. quarter.

sense. right. some lines, pretty you the And could along market for that we significant consider kind makes All of moved sort now then small builders. your markets of more you've over of course then as couple greenfield And into capital a That you've could at next you the aggressive years, of Okay. new markets, the expect look X lean the greenfield into of out or we outlay opened? Doug, acquisitions those so

of mean batting good I would tell Orlando. got -- would into Orlando Coastal's Carl, I leaning tell you're I you, of momentum, lineup, behind question. and what inquisitive, we're I the right mean would does we're but really I lot saying. always Yes, so you -- lean into Utah has a lot

Tom new opening their Toll. flattering allows message, we're people. land of the Tri with and because can focused why lot are They So won't divisions, really tell really markets as and to quite mean demonstrate and sellers to it's like to kid we're ventures core but I I that, and our X for Pointe lifestyle can't how around gotten you land these both leaning how -- get to premium those expansion in in of have on into door and brand. kind Main. locations. we the core you joint product at a That's us be Doug, locations. I do for I me know, we was it the those saying Main of in me

from McCanless Securities. question Wedbush from is Our next Jay

in down the more wanted like issue. something competitors dig rates that's Is an hearing your we've is become I to here about that especially saying Or aren't mix? to what buydowns, of So that that? what headwind can from things a October, the rate on Because you're of Doug, really buy-downs, about exact customer buyer's do the basically, is a lot offset been sentiment. it you rates,

to rates things When well. tend have I'll is not reason consumers' volatility, what Linda. is this understand the consumers with about. hesitate here X because happening as and of the for pause in really or think Doug of terms Jay, the there's add may understanding But it. they in start One is there's to volatility.

the there's can On Tri other side, for. customers qualify Pointe's what

our of is things said forward our they Tom don't at that on as dollars use interesting more personalize qualify. And and of our traffic to of very good they to great advertise ultimately the income incentives earlier, they incentive they and have need into their even studio customers design galleries, commitments driving homes, though home choose that's as financing their because we help one use new for are the can much

So is to not ultimately, But reason the customers help people not volatility. of for forward a move a we and doing understand education buy. our lot to are rate

Say for our backlog, deliveries it perspective locked And the the into QX, in average was relative you mortgage of to average rate our to mortgage X.X%. is rate then forward X%. put moving

utilizing So it's permanent significant. while buydowns, not are we

So as range. are well that Linda of X% able said, our purchase in to buyers kind and qualified

Right. dollar for our used commitment and third that's to obviously, customers our the dollar for use prefer studio in approach. orders quarter And X% forward of ultimately, not the only we design

a going year, about like, the it, about customer Or mix entry-level think Linda? thinking it is next that you you're you to when how to had, mix? I community XX%, call growth what going still XX% question other year, are next is The look opening with what have,

level. that to now, your similar move-up weight that And what the then first move-up with Very premium is mix and second first entry rest which we're up. delivering XX% of about move is to

from Zener is question Seaport next Research Ken Partners. from Our

a large a smaller Doug, national you're broadly talked California. about you you said in footprint, being but on builder,

you weakness, segment the the I think other seen talked I by your would builders, the But could margin demand orders. margins, you regions. so of referred versus after say, for I and could real maybe regions kind -- the around in incentives seeing strength many of what you in -- parse terms a quite about the comments the gave about we've you're versus data? think incentives period expansion to West talk you of largest, other fourth West or of But pre in

on very been the were with Inland offered strong we mentioned, line us, markets a there for now. of our continues big our be to what Orange Empire announced but than we and little Well, Coast Arizona, West and that Pointe, have market overall, are Tri it including remarks, -- basis as orders represents Washington, County less and incentives for the very but a in so deliveries in driver XX% California a

Welcome, the it's West line, continues Tom. Ken, we're call. bottom to have very on to for us. The today's well perform glad you

and But expect appreciate highlighting misunderstood that Doug of It's and the I so California, is over well, rest really to said, the And continue. been rest you the performing we years. as that.

piece And you what [ of housekeeping, just was the ] inventory? could -- WIP

have don't I of back I'll get to that on front me. right in that, Ken. you to have

from from is Alex Our Center. Barrón Research Housing next question

it? as that? about ask to interpreting wanted are the guys fed Are you you interest waiting What the lower people Or to far election? understand to hesitation are comment. rates I the for guys the as see how hesitation was wins wondering I they who is waiting further?

it's than around events long geopolitical in Alex, Doug. about you've a anxiety we've in we've And And table. that seen is mean a kitchen mean more what's Well our the And it's careers creates more I hurricanes, got this more it's the the different, here election see talked nothing no I this probably other about. is to for little time. uncertainties. election. consumer something wanting clarity happening

where ever buying of the and going, in job expensive so about good where is and you're forth. is the your this that and own your is it going most where remember, so on business we in world guess, -- is going, I confidence very mean, regions going psychiatrist, country lot you need to we durable I life, X the a if you're the because build would be buy a hired a helpful in

very And good So the all I hesitating season selling demand spring I is those and provides are should into, that hesitation. spring a just is a But demand that very fall hopefully we season. little would mentioned, is deep, strong. think selling to very factors I project a They're as earlier little say. that going

field seeing right now, So we're that's we're what what the that's hearing. in and

huge was I a like quarter 'XX, dipped question Yes. it I say, in, pattern of then quarter year. the had year bit And and quite going as it because first this be a at guess looks that to jump last we fourth sequentially, next order look in my of

you we wondering as are anticipating guys see was 'XX. move generally what So could if we I into that's

That Alex. seasonality, of normal follows kind

a that's think I So reasonable expectation.

January We'd like jump. the it call to

Did What in was sequentially much about you how times. times build this build in year-over-year? good. Sounds guys any see improvement And so, quarter? it if

Yes.

seen and schedule. picked XXX-day improvement, a quarter-over-quarter. to template But average, schedules. day we're continue we're day up on on our a encouraged baseline build X or really on be We working slight maybe right We've times, our our by

So that's very normalized. much

pretty expect baseline your guys you you further much you're any improvement? Or now? do think Do at normal

our look our We're will more but at to if we at see we're improvement. look ability our that in continuously adjust markets. an And templates of going normal favorably, we to for all baseline,

closing This Doug to concludes for comments. turn the floor I'd the to question-and-answer like session. Bauer over any

all wonderful Well, for soon. talk to joining again, call, and upcoming today's and you thank everyone, on you a have us I Thank you, hope you, season. holiday we'll

teleconference. today's concludes This

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