Beazer Homes USA (BZH) 13 Nov 242024 Q4 Earnings call transcript

Good afternoon, and welcome to the Beazer Homes Earnings Conference Call for the Fourth Quarter and Fiscal Year ended September 30, 2024. Today's call is being recorded, and a replay will be available on the company's website later today.

In addition, PowerPoint slides intended to accompany this call are available in the Investor Relations section of the company's website at www.beazer.com. At this point, I will turn the call over to David Goldberg, Senior Vice President and Chief Financial Officer.

Thank you. to the Homes year fourth XXXX. welcome our call of and for results quarter afternoon, the conference Beazer discussing fiscal Good and full

we in involve We to a the do known forward-looking Any during unknown risks, speaks actual aware as be Before results statement other differ statement forward-looking to is date filings, and or events statement should made. factors new undertake from which and any our we cause described making projections. statements future call, SEC will update not that Such statements. uncertainties you begin, our materially of this only be otherwise. obligation result any forward-looking the information, or revise whether of as may

from not to is factors. time all such it and possible predict emerge simply time, New to factors

Allan XXXX multiyear On Officer. highlights any Joining year detailed in of end Allan provide outlook significant our results, fiscal quarter then color with questions time. are and the our our me with our our from making a land the progress will home conclude we for fiscal I'll today XXXX our will we outlook sheet results, full our take the the new a recent Allan which call is Chief first Chairman on for discussion sales, and balance will both for discuss expectations. our towards additional our guidance and and Executive spend after goals. fiscal for Merrill, today, preliminary environment wrap-up, remaining

call over to will the Allan. I now turn

of fiscal the generated of results our shareholders accelerated contributed We our this toward multiyear us joining we double-digit returns Each goals. on Ready invested had to these adoption for you call future, you, Thank thank which Dave, our Energy a practices. productive very during and building progress afternoon. for Zero and 'XX, for our

and stretched environment encouraged able a that stubbornly to were sales these by outcomes home rates. particularly characterized high new affordability in I'm mortgage we achieve

Here development, highlights the the XXX growth, up this We about from community communities, poised us prior invested further year and $XXX year year. nearly land more from up allowed several the count year-over-year. than we're land for both And end active This are XX% to and with million next. in XX% year.

And $XXX and generated adjusted our per under adoption million share We homes dramatically $X.XX, employed the becoming earnings just equity. that on in double-digit all-time single-family of both delivering We in returns of and wasn't EBITDA leader homes Ready, program. single DOE's it Zero and year stood our out. the accelerated Energy representing capital national

we XXXX, maintained for And customer with During for reached employer verified of owner position rating TrustBuilder. as we the multiple engagement and employee organizations. third-party according culture top the from experience only the our recognition an site, spot choice in homebuilders, among industry to finally,

In very by stayed course for summary, made sales sales housing But a target. home we consumer realization many the longer-term later remains in and new and 'XX macro about in the intermediate was entire sentiment uneven fiscal anxiety while with segments customer new quite outlook supply on the meaningful election. grappled the environment deficit home was fronts. for in the declining among our the affordability, this particularly demographics, industry demand strained of favorable year, and positive, challenging, on the Both structural characterized we progress and opportunity as

discounts or from more we quite addressed it last builders In time, At the bigger rate on economy. the year-end the cuts sales that were like buyers environment challenging direction had simply at Fed, when investors. fact, clarity been of seemed anticipating the

and to markets, a prices improve modify did pace. closeout of into pace-challenged and our in sales markets our communities. We handful in also that incentives lower lean specs Ultimately, considering our were to we sales noted their how approach focused we on

even across September, efforts, continued strength with spec higher-margin In sales. sales improvement sentiment, to orders as over October, up momentum as better count on in up our withdraw consumer community was our these almost a returned XX% higher in we homes substantially more we were levels. that saw the XX% a By incentives. both sales together to modest led to October began and pace to-be-built normal

and said At and year, as been, we to mix seems into that, our both of fiscal growth provide an by this guidance. our influence and early granular, unwise environment it visibility likely our and the will to the with patterns stage share full an assessment sales try informed year is outlook difficult community how fluid in as have pace. year for they sales Having count macro

Our count average community was XXX. 'XX in fiscal

count be We should will line communities, community between full which expect top year XX and than XX lead XX% up to average growth. more our

ago. At rates macro in to the rates view significant optimistic as But a sales. in Higher the of since taking balance spec the typically larger This do elevated. fiscal less market the a rates over level, that led not months than our expect we remain we're have reductions September a bond mortgage sign mortgage of movement may is several year. share

a our specs, which carry of decade. contemplates the somewhat XX% than outlook lower closings, highest our represent the more such, level margins As will in

growth. will likely may per wage to both tax X.X been that so-called Having And it expect Despite most The a addressed have more and about job we growth. to seems between in elevated rates, landing soft paces we range our per historical month. policies encourage regulatory remain sales optimistic to closer X levels improve price-sensitive and and community something sales markets, achieved.

outlook Taken leading return on together, of double-digit significant level a generates contemplates our capital profitability to a that full employed. revenue growth, year our

midst that's a in pretty growth we compelling. meaningful the think For a of phase, company

expect our make multiyear Beyond 'XX, our for fiscal goals. on in profitability expectations revenue and we further progress also to

and sufficient double-digit count next have to We have on a ensure 'XX XXX we this year. ending than land with path communities. more around We're pipeline end track with fiscal year growth XXX a clear a to fiscal community to

track ratio little a remain to debt committed have lower trajectory below bit We We our 'XX of in face ratio net in to fiscal by increase remain on XX% end net of the volumes. closing to to a allowed as growth even also we fiscal 'XX. capitalization the this

anticipate X The higher flow spending. cumulative allow to we even years will land sustain the profitability reach and next us we over cash this target as

continue to second starts standard. of we the goal Lastly, have XX% of our to the met Ready. 'XX, In homes progress Zero of our DOE make significant Energy FY toward our half XXX%

starts this be will still few we'll by from While prior next have XXX% year, in time we Energy closeout Ready. communities, a our Series Zero

to I want spend commitment our is important a over Zero homes call the minutes explaining couple to so to of shareholders. turn Dave, I Before Ready why Energy for

product attracting demonstrably to a company. new In are many fact, high-end communities land access in our of some master-planned to benefits for having to including talent customers, preeminent there and the opportunities having better country's

buried we sales is are we Zero versus sales pricing and pace, will is we're prior our call why rate. shareholders. federal than for almost for Dave. benefit today, that, and tax and as economics are our Series because better Ready focus position already or on more margin production to than for recognizing very our Ready we homes our forward. higher I'll for this our specs Energy But they're the With homes. profitability Zero tax the important point our These to-be-builts. Zero improve That's a our Homes That's effective When in us over margins X before builders of efforts. Energy realized homes, $X,XXX the very other believe And the can whether And build benefit even all the refine early on still attractive. We at costs in homes point Energy moving Ready they innings. turn backlog, look

my This of will specifics more sheet our balance comments our year. quarter concentrate some I position. for fiscal Allan. first will I Thanks, afternoon, with outlook discussion a and our the on our guidance land providing and on conclude

We our during our XX-K. call. we're have release XXXX year and of and them fourth press to fiscal And our discuss in our the detailed Q&A presentation, happy quarter course, portion of our results full

expectations our first start Let's fiscal the of quarter with for XXXX.

as few over Period-end community about be the last increased XX% should benefit land count past year we period same our spending the years. up versus from

prior Our XX%. should about XXX XX%. higher homes an with growth versus ASP the of generate $XXX,XXX. should more year sales pace year-over-year around More by average communities around and sales accelerate of We than pace anticipate closing

gross a Adjusted margin quarter XX%. gross sequential X reduction in should The be fourth margin around factors. function related of the from is

percentage our X back a to-be-builts. the XXXX sales and of total below increase X specs to carried typically in margins our as have half points First, of

spec sales quarter, homes handful incentives Second, pretty markets pace. a we on heavily of into particularly lean stimulate to our in the fourth in

quarter. in in some or will since though of reduced communities, impacted sold Even incentives first margins be the these we've cases, out the

first a percentage margin should should the point for as our for of fiscal year, a than X operating SG&A represent helping last XX%, same revenue quarter to lower be about The around time our support margin. trough gross year. the

EBITDA. should We be just as a homebuilding $XX of to adjusted XX%. million expect approximately be tax our in and Interest amortized about to X%, generate revenue percent over effective rate

given weather thinking our on versus to we as on communities where pretty credits I share tax years with about in average count, in up XX.X% to challenging, closeouts. Predicting you $X.XX. timing, and in full our to our XX community outlook diluted reflecting community to with give have sales generated and variability add This XX% per pick should we to precision line potential With the count rate left how earnings XX expectations pace outcomes year XXXX the is on a growth. off community lead of harvesting The land benefit XXXX. this to in higher development count caution, we're of tax Allan margin. prior of expect won't about range is gross and perspective want

sequentially and more activations be back half our our could in the note on the closeouts. community We of flat of depending are down count second year timing to or quarter weighted the the

more and community to our and an full historical of achieving a XXXX. sales between We month norms pace line X fiscal are with sales per committed improvement the for per X.X year, in

quarter. is and gross XX.X% the of The end backlog the in the to drive has XX.X%, in spring spec XX.X% at to able X/XX balance including range if higher margin closings or incentives. The year. margin full we the close lower-margin share greater attainable further a for remain we're because anticipate year, can sell much most between be in about is we implies Nonetheless, reductions and the elevated backlog to-be-builts in expect This through of our we high of sales the the margins. will homes first the will of

less are visibility year. better and to market SG&A into have fluctuation, and our we ASP subject for expectations such, as the

community fiscal of faster Further, heavily believe mix and our the and lead to should while be still count $XXX,XXX we're closings, ASP near to higher over we community be year than backlog our overheads growing openings in growth, revenue $XXX,XXX. driving and ASP SG&A XXXX, our percentage XX%. our Given our should investing about for

we point. ranges, Here's would EBITDA end return of Even the of expect low capital at another the to each year double-digit generate key on employed. of the represent that

EBITDA Any low above better the our our end even growth and in returns. metrics improvement drive of ranges will

enough sheet growth Our the more fuel XXXX exceeding with our million of than at liquidity remains aspirations. no the liquidity maturities balance year, until fiscal healthy $XXX October end total and to

get net with our the expect to and net and sheet. to the We of XXXX fiscal improving mid-XXs, balance to low net we're to to XXXX profitability generation XX% will our cap debt by end the fiscal in as below a on cash net cap debt a path delever end

capital years, increased and to been our investment. X land able XX% annual last return book rate a have we've compounded on sustain as a we've the growth value Over grown even at our double-digit

year allocation us capital has value quality and XXXX. fiscal book the positions another of of growth and execution our in Our increased for

and XXXX, our which increase nearly lots, owned and lots we've position XX,XXX that fiscal through grow to from option our total of we fewer exceed land Since in $XXX XXXX, million, option spend XX,XXX expect our done from position XX,XXX. grown our XX%. to primarily total lot around should gone owned lots. to nearly and than option have lot to In we've And XX%

over With to that, the I'll back call now Allan. turn

positioning double-digit Thank and growth us growing XXXX a count, you, community year product summary, XXXX sheet, our strategy a generated multiyear a progress for entering our differentiated In a healthy We're as and executed goals. real company successful was on Dave. make strategy with we returns. the to balance

Finally, years strategy ahead. I remain for have and convinced and we the in durable growing to team our stakeholders the the value create

us take Q&A. turn that, operator the into to With call I'll the to over

[Operator Instructions] Our Julio & first Company. question will Romero with Sidoti from come

about guide. in that talk love you're for much for count your in And a the outlined ramp thinking This maybe is could ramp. the Alex Hantman community very about little you to how growth? I bit sharing we would thank on path Well, for hear Julio. you've the confidence

Well, year would on growth ramp. the that in around we real the good that new you, about and and pretty online, confident to the have XX the we kind the I feel feel about of we've net look, growth talked tell XXX. Alex, Obviously, we visibility coming the had communities land ending the communities with about XX that we position

maybe touching just a talk pacing. in sales maybe on to what seeing improvement little September? you And you're about October, Could bit some relative

And that was incentives bit, Things But in see that that nice And Allan. September. and started better the we October lot peeled might frankly, had got a looked to I to-be-built Yes, little pickup back rates was older I as in out slowdown. we we Alex, encouraged to some heavier a offered up some concerned September. like saw because sales. we clear of away inventory, a it's

So just it around specs. heavily discounted wasn't more

Zelman Ratner hear Alan will Next, with & from we Associates.

of X end any year, it's on to for guess, It's point. guidance your given one high drill I X.X, bit this end. full at more the the to is I a low a the pretty in environment. absorptions the changing wanted know tough little of the So I rapidly for just data range give outlook at to at points year But

was per month. but ended pretty X.X a solid just was challengingly, year, obviously, year spring. under the especially And absorption generally this in year pace the Your it

It momentum So more in doesn't I'm as a mortgage on meaningful bit as curious it little those if economy. little drove or back of some rates through seem that you're anticipating you pulled October. you've could in just because talk like the bit the any the expectations your like far incentives improvement there seems a macro of

the low in a confidence 'XX rate So with that what 'XX. your you of at range guidance gives end absorption in the that they'll come versus even better

It's a it time, last rate a long by an quarter mortgage we've the lowest was October was and was disappointing, the and great had characterized question, that Alan. year X.X and rate it November absorption X% in kind Look, in made a May, August, by our months minute I our you really And punched like feel as of us the the took got in challenging. I told in to it and on and first others mouth footing. find we June, in call competitors

been us spec think were somewhat out I think we we range mortgage in. of a rate give obviously that specs had over is started spec-ed historically mix and together And not or will of our confidence over dialed part we started, we in we and of little we've which as in bit in how environment, year, being combination an accepting X% I we the think last the that back larger X sales better be things of And getting those specified homes that. and a I a the position. had addressed share

in pace we I to up are where know exactly that in year year. -- be going but next at Now this this don't obviously sales range, point,

I do I September When next year, Sorry fiscal between XXXX, meant confused too. I our and get that, December. I year. said

understood. Allan. that, I appreciate No,

some decade. right, is your generated our Second adjusted, I sense expecting think I that makes Beazer-specific, higher rates option to question, year, starting -- not of the and And your I given over many ramp maybe and guide if terms the that from look just XX% we're developers necessarily attempting in chatter stayed XQ you're a the that builders model to down little be some would clearly but sellers bit think you've margin explanation and at renegotiate to are if fact prices have expected. take -- that margin to But hear through land I me. know lowest a had some than

more remained have elevated. Incentives

changing than renegotiate still your them the margins the some do better margin environment recent even expected, a the So your buys today? are of you where process generate given than as trying you're generating market, environment? margin had today and macro you peers some and you your come choppier like with take relatively those and you is you'll look Or feel more to maybe of deals as land at where that of maybe to thinner in perhaps

mean because it pick cherry I I mean, because way it and different they're, one and nearly transactions I XXX between tricky under answer answering way. and literally just a little in contract LOIs cherry or flight is pick Obviously, answer or a that I could could closed.

we sales through my I of associated the from were we deals think top it. the struggling the walked million the as I quarter, I third we and right of in one can away a re-underwrite of think had summer that think bunch broadly, write-off We $X off did pace. head, in with

We have gotten place renegotiated point. our We've pricing this deals. our 'XX largely 'XX in new of for deals. at handful on is frankly, tougher a our on and But underwriting

I say that's available. wholesale So there that wouldn't is reset some

think I little I ASP. our is it, level lot XXXX. it's about think one to in a the where it back about a think this, and was think what to of of I a bit our And cost ways percentage as finished

historical There And HPA 'XX, 'XX, and inflated mean, benefit cost kind on did. of base everybody 'XX. I frankly, the of was had We that more margins. a top

relative prices they not land period, a bit I to little But substantially then. ASPs. pre-COVID were back look different that are they're than elevated as think I to

from comes next Our Tyler question Oppenheimer. Batory with

me. comments, want that your homes the in about prepared in Ready Energy Zero you're Allan, start, for couple to I you the talked A benefits seeing. And

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it So was savings. of I annual $X,XXX think

my asked I team, I So "Okay. said, sales

few much $X,XXX $X,XXX go is answer. mortgage a this back a had home supercomputers. the or month would rate have the -- numbers weren't to year a savings?" create of come They And lot So to they a crunch How on with to drop money. a to all

for a to And would that than rate have mean, effectively a light forever realize, mortgage of $X,XXX savings. talking, a gosh, realize the mortgage think of energy that is. was this more point it in equivalent your as it And the by less rate team sales it home efficient bit the they because in order little bulb point I moment. on moment, X whole I And similar we was drop having was in a -- home to to is answer were how

So talk our a customer really important to a what's of makes lot that customers, big difference. when a about we for

Okay. question incentives. A Excellent the detail. follow-up on

sounds back? that guess, to you which able to Are you've 'XX, did bit of improvement. pull where same ahead markets look lean then I a ramped the margin and pulled You it part sound markets And those when are gross like more? you in you incentives little up fiscal you lower back. like been incentives

overall. expectations kind for that, just the next And your industry little for incentives maybe of talk more Just about year? your confidence in a bit

that are sort of all needs terms to I it Is change? it There on mean aggressive I'd the of what is of I to your like these lots pretty that there robust. thoughts topics. are for appear of competitive are pretty what happen in out does builders levels getting mean environment to offering. mean scenario? you those in kind mortgage a just stay? curious I here incentive do think just rate be they're

just lot and All gosh, for not be a quarter, good good. How couple the is second made of said, sales incentives of fix going I'll markets a let accurate. did to and very Dave our to I "Hey, I it and it, It smart, that, markets. my take in you, it." did me a I'm baton intentionally. got feel a Well, let right. the last those to take But was to in about tell about and we've I And pace him to got team talk there's I there. I markets, a hand trying Tyler, piece I'm singled piece of But here, when it. out but the a not just it

our reallocated price places know say exactly do. strategy to level specification. lowered those of we happy be who said I did am going we the to more spec costs, the closing to we what's competitive. We are terms we they also and that They prices that the in reductions were are. things we But of fixed

in led directly it a markets So sales to things dramatic did and we in improvement pace. those of these all

called them Houston shout I a last on I fact, little out give to because will quarter. In

I think number approximately and -- I between right. and is August September, this

more that as doubled withdrawing I the monthly know pace in sales elevated than sales. they were October sales I even incentive. know that, stayed we our quite

think we appropriate communities that's to solution. our allowed about really not we feel the of and good price wheelhouse. pretty So and I short-term an and out points I it diagnosed good The and us submarkets is at applied news problem, sell some

And in a part lingering that has X effect. that's QX, in so margin think not or certainly is that, long-term it some stuff got our don't guide And that I X. of QX that has

full the really think for we said Now year, I something important.

had specs X X to lower tenure, our they for expect specs. have than closings. be closings my COVID, to-be-builts. well, had years had a consistently points the We at never X where In in XX% of XX% our were year they've margins consistently definitely, to And -- middle of we've

So that's our predicated of sort or outlook or is predicated our guide on that.

to have that that carry we percentage, we are a reflected and larger accepting higher we've rate going outcome in are today, margins. what our a spec in in that's shared We environment

Now through sure because secondarily, will that's if flow than the that we well, we that driver. get but really that. where the biggest better in are now as going between relief, there selling April, betting see rate if and any of would reduction margins incentives, be And to a we then some able be end not on of any robust and to, for year really bunch season full a we're our sell to-be-builts, are spring of range low

Allan only thing I Energy Zero some Yes. would on Tyler, price talked you, the Look, costs tell is about Ready.

end back kind given. of end another to our think in about, kind that. margin margin X% that that, But assumes would that dramatically low drive tell to we've range better the kind opportunity I of X%, down than goes that that some spec of not frankly low you that's of differential is I look, we've XX.X% talked that but that not

Okay. Great.

just of the there rate issue you spot if for the on But for growth that's I updating EPS a year? be your on tax put time to the year-over-year sounds and on -- you I can the be sometimes a real based it I out low rates here. used like end growth impacting too next the a don't Or see different should appreciate little So growing question bit perhaps can I guide, EBITDA you the model there's think all treacherous. last much mean, next Do XXXX, basis. want year. me, -- a detail just

Yes.

Tyler, the with start, tax let's situation. So

So in benefiting previous energy still XXXX, harvesting from from we were efficiency credits years.

guidance So XXXX, forward the saw being will on gave at be -- bit we we tax that a than as QX what going we rate looked and into higher the little look XX% affect to as around comparability. is we

I pretty we're return return on would clear a tell made we you capital it and employed. a generate on comments, in capital, What double-digit our to from expecting

year, that be XX kind if again, in we'd pretty our lower we year. were than of disappointed this to this we better, right? or it XXs, be Now it But ROCE expressed was was expect we've

Our Jay from with next McCanless come Wedbush. will question

fiscal I that you're correct? margin to just is gross adjusted to, 'XX forecasting wanted the on clarify guidance,

That Jay. adjusted is margin, gross

and community to I is going -- next then I I And could get got count some it try going sounds you're confidence guess to guidance -- grow, guys not to way. back going and exactly but the why it have, more a reconcile the guess, when is be guess Okay. absorptions you may the quickly I on to count there sure the normal how that doesn't you've said grow, to but it's level I along you push in grow. the question pickups know like

the aggressive I along given why on So guidance pitfalls go guess, way maybe community some with count? the

I right pace, left are X there hand. hand, Jay? and right, count things, community different Well, mean

summer And to I and paces. better than I don't So going pretty side, done summer. on we'll had we're I the that simply a that pace than the we have easy expect we've we next November problem expect sustain us better think comp. in October. want better to this do

we've on think on I to. be guided and that's to up ought year-over-year pace, So balance, we what

you we're is you quarter, coming sold more delay it's The X-week a XX%, either but up or so a X different or other into in. you can with to Those apart boy, timing because the quarter related it's and of We're on before were miss from lane happen. get month because up we're in community point able entering by a timing mean little -- XX more the had things a I year new slower and you little a XX%. and DOT communities bunch that grand the a the of of turn faster communities. from open can Separate than closeouts, that, the didn't kinds clearly, slip put the

of don't quarter, end said, get all going the the to be What average the fits. from QX. first math count to that in sequentially Dave year. So sure will XX said we we're and at about XXX between to whether what up don't is the be and I That we up for second QX we've XX communities, though, between know know, community is

and and digits a be ago. year double double up up over a QX a up year over be QX will year ago be ago, over QX QX digits QX digits will double will But QX

we move year-over-year uneven, So provide but little think that a to is clarity locked were 'XX. may the I for sequential the in just growth be some trying

ranges understand tell the I would the tell don't words Jay, aggressive. the we a like of of really I I reasons question, one And we're -- you Yes. think now. I that There's and thing lot and only uncertainty you is gave would outlook. on focused being

end high what I toward be low of And think a a we'd get Allan number give then the you we end and think scenarios to could things happen. better, as could expect we're the of to trying get where if of things range. yes, mentioned said better,

that to be bringing be with what out locked XX% that most just entry to have what better -- demand is seems you're across last then the Or product homes, 'XX any from to do going And up there had, built? community of in it question of level, pretty I is industry flexibility that this this down, you community your to go given on the guys to which and it's you some second what put and move-up, spec for some XX% change be mix the on open year? assuming in count down going whether of as move-up are bring to that's or opening to front I'm with first Okay.

in say this I XX community, the disconnect question. that think year, I in the that Beazer. it let's community, communities. other appreciate When of them you. for case But respectfully, if Jay, not something maybe are left about other really to XX% wouldn't to-be-builts to are any or that's we sell, want XX or in XX given mean we're I level, entry specs say, going some specs you kind of like but it's way specs in of of So ratio, homes a them and I to to

me. follow You

leader communities within price we to communities. don't that market. not the different clearly, mix the position just we we It's are And in have have. So the the

in don't we're a us but is building So It's market Zero a are home. I there move-up builder lower there that know the better when every Absolutely, with home builder, in, that not a -- expensive a you're with is I call price. a Energy home. Ready, least

million, entry-level $XXX,XXX. may given feet. the may -- feet, for It that. it's may average, our square Now going about don't it X,XXX $XXX,XXX, specs not us, do as cost said, are really in not But be cost X,XXX square a We is $X market. it to be too, it be And product. David may

the Ready you, high monster Jay, to to-be-builts to XXX% it right? Energy get would I exactly are ], the tell we quality. homes [ build Look, very is the very, specs All commitment are of Zero

Riley. from [Operator hear Rygiel Instructions] Next, with we will Alex B.

go could bit of you and the different some little chance Any about us around the talk the country of weaknesses sort to across a and strengths geographies?

great. have happy to a of health market pretty in and great. which well. in was mean We Myrtle it's market really and closer interesting did that. when particular. I what team a the And did awesome. price pretty interesting tell we're markets Virginia team. see differentiate general points the a in nice you -- in Beach wording, our had we We Beach than Myrtle fourth we see you, I'll be my well, I'd did is see because very had to because Yes, in I offer surgeon maybe That's good. maybe that. D.C. that try mix suburbs mix And it's traditional an job, locations We we perform different would an though, the of very buyer in did and of our Virginia, Atlanta highlight I that disparate quarter,

West were conditions. I Las Northern really us, and markets, California Vegas showed those up. think out for healthy generally then they And in And

candidly, it's market. was the part major a probably and quarter it in third to So think markets. I not of We're it was think the be where I pretty about think us, I addressed of Texas. but Texas. feel I we've And got part are was of and just other in of very big in the that, we Where us, we lot some in struggled good

And good comment. And I don't bad want make is experience bit just I'd them idiosyncratic. more so be or a feel reluctant I like a our little to on because to comment

They give For because, the volume probably better handful on are only there a about that we builders market. to read how I you And XXx at did. you or can can a example, some gosh, there doing Phoenix X are X there our communities X are. the tell level of

next it and then like And is the bit. messaging picked But actually October, yet builds spec helpful. for September expect more mix months the of builds. to sort a Very in up little your dirt sounded shift XX towards

could you maybe those if X. So reconcile

Yes. It's number. coming kind a mean little and a lower high than August of off specs was percent of of than crazy was lower October and I that. was September XX-ish bit that

in But wasn't majority experienced a more exaggerated to-be-builts. majority candidly, in definitely of bit still strength we So as it is the of and in a August. It little trend just the direction in July was a terms specs. as right

higher where for a So August than certainly and September. than us, but in normal the were better XX% we reflects level

question last Our from will Housing with Center. Research Barrón come Alex

sales you driving year? expecting could you specifics the the give what's more changed gave hoping pace you could example of increase Houston the what are in sales if was I in in elaborate you doubled this confidence where the guys on

in out things the spec we detailed think the think helped. we the Houston, cabinet, found And we we think the market. we the lower home we had that the we that level did, and some getting the particular, specs me that I will But weren't some proved aimed over think let the I countertops, spec-ed took money in in I that of for. that be put margins like of paid I review a very clear, flooring, of a ourselves little and high in specs,

to had so and it, the didn't it. next And we fix spec get have start ourselves, over

We a reduction, we our other reallocated the things. we and or But closing into price costs to did it moved away incentive reductions. took price substantially

geography. honestly, Sometimes is simple, it's as

be with $XX,XXX ] And that, advertising it some advertising [ XXX I incentive, think you better like might XXX was If [ we did. you're off things that ].

healthier bit has there kind of communities or Now strategy and related helped with in that think were of And our as we and just was consequences, but sustain scalpel-like and level heavier specs in little were then getting closeout very communities. some it working a it of activity. to-be-built us those I to a specs margin a fact, dialing combination pricing a

ton a XX% your ton you double of if of sense, little taking increase Got sales a a think, your it. Yes. No, makes it I sales can or in margin less bit sense. makes

a Now to something by same that you guys to they specs, you notion, share either that get before are buydown -- offering building completion? absorb more people those rate basically or are forward or sorry, the commitment causes

gives important, proposals buy-down we've get some permanent customers We options is they important. if for effectively bidding Choice us that. mean our for conserve can cash set buy-down a permanent to program multiple for proposals can Well, great or they And If temporary and get buy-down customer's that had like Mortgage our business. so a do feel lenders our I is short-term customers. always of that that. I We a a lineup. qualify get

of incentive, closing So our loan to is mortgage really than order you yes, customer most I we've get policies got And tools. literally argue more our proposal. get of every more to would the arsenal have full one than because in one cost

know customers So choice. of the our benefit we are getting

And book? one given your share Any Xx if ask could thoughts on last it. I buybacks, still stock is one. Got below

I always returns. think risk-adjusted business. would -- way. Alex, about We would capital same No, we me, excess in we tell excess about think excuse And I and the about the this you, Jay, liquidity think

return said, highest for risk-adjusted certainly we're excess that's it's in arrow it while while capital, with has and so change. if the opposed our not an and And primary it it's the we not growth been That focus going to quiver. certainly land the and as spend a has been about think

have Ratner & do Associates. from Zelman And question with we follow-up now Alan a

have given few issues, of a related -- of change. how you far concern example, at there curious, deportation, kind been about GSE to change. obviously, to to just thoughts availability, and months the does thoughts mass from any all proposals about about week any, we're So ball kind point a if upcoming like what the about, any and away the administration out for anything but you here, kind of you've discussions labor still election that impact, all up But as whole jump if the this post thrown administration of host a curious Just a discussion that as think as reform?

about you would on dodge Board GSE know, there I you the I'm GSEs. as one we the going point as it's would significant. stone, of But puts I other as cast tell to talk I'm say, because, little you issues, in at think takes reform Well, and so fairly out. far, I

away. mean what days part to on ago. all that that's of we comments And decline that September. a and stay our beginning were the through X XX I it rates the good pretty thought a of lines rate a realization not of in One mortgage rates August July, more of this gone in elevated quarter is likely than compared, kind is frankly, I

In the think higher than points XX time today fact, rates are last were basis we talked. they I

combination Fed action, some I realistic or spending think reduction elevated. mortgage in accepted rates, is we more thereof, notwithstanding some have that could chance stay that it's whether there taxes or

So internalized that and we wrong, but that's we've assumption that be an that's we've could one different. thing that's made

I be think about or there's pretty an of economy of side, and on the adverse level I enthusiasm As less talking tax you and will creating cuts like clarity from fear levels standpoint. feel when think deregulation in I that about do the and doing tax growth helpful actually some changes, start

legal a around require that society. number sorts in would some competition took place we that entirely of is doing that it changes Now they're tricky the don't happen. are the clearly is and The a that labor course, super I'm our the to policy, on if from people policies all beneficiaries. and level certainly for housing of direct create country that suggest could it's are immigration of broadly does the our sector. mentioned you have that other dynamic, jobs, the have not that who that Like we than trades and immigration third they But other impacts I are employed had -- leg, of think issue. undocumented withdrawn

I think is. as ambitious that mandate as

are the think it timing clear. far details I from The far of of from clear. it is

pretty on good and it, The got but I effect will kind about. can't of my X think mortgage we think little projection I've any we're felt have. it eye likely make and in of there's So going more higher And an rates. exact what to intelligent a I about going rates do tax be regulations. I form rates with it the to confidence pay for

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