Jay McCanless: Great. And then, talking about the gross margin, could we — Scott, if we could zero down a little bit more. Should we expect, once you factor in the purchase price accounting, that 2Q gross margin is going to be fairly similar to 1Q, or is there anything in there from an incentive or delivery perspective that we need to be thinking about?
Scott Dixon: I’m, yes. I say that’s a reasonable expectation outside of obviously what happens from an interest rate in what we’re able to do or need to do from a mortgage incentive standpoint. But from where we sit today, I think that’s a reasonable expectation.
Jay McCanless: Okay, great. That’s all I have. Thank you.
Scott Dixon: Thank you.
Operator: The next question will come from Michael Rehaut with J.P. Morgan. Please go ahead.
Andrew Hassen: Hi, guys. Andrew, I’ll be on for Mike. Thank you for taking my question. Congrats on the quarter. It looks like average order prices ticked up nicely sequentially. I just wanted to maybe dial in on how widespread that is and your outlook on the ability to push price in this environment. Thanks.
Dale Francescon: A lot of that would have been driven just by the mix. As we mentioned earlier, just because of circumstances in terms of production units, the percentage of our Century Complete business, which carries the lowest ASP, was down below where we’ve normally been. As a result, that brought down the number of homes that we closed that had the lower Century Complete ASP. The higher ASP in the century communities had a bigger percentage as a result that affected our overall average sales price.
Andrew Hassen: Got it. I appreciate that explanation. And then, just secondly, I was hoping if I can get any more granularity on community account growth as we go across this year and maybe any initial thoughts as we move into next year?
Dale Francescon: Yes, absolutely. I think we said in our prepared remarks, which is pretty consistent with what we said last quarter, is we anticipate really community count growth throughout the year, but really being back half-weighted as we’ve been adding to our own and control pipeline. I think it’s when we sit here and look at it. Today, we obviously opened up 42 new communities during the first quarter, which is something that we are excited about. Closed out, quite frankly, got a little bit fewer than we thought, which was a good thing given the market demand. But from our current kind of look at the pipeline, we really think we’ll be up mid to high single digits on community count as compared to last year by the time we get to the end of this year.
Andrew Hassen: Thanks so much. That’s all for me. Good luck.
Dale Francescon: Sure. Thank you.
Operator: The next question is a follow-up from Carl Reichardt with BTIG. Please go ahead.
Carl Reichardt: Hey, thanks guys for all the helpful colors. Really appreciate it. Just on Century Complete and the mixed shift a bit away from it this quarter, as you’re looking out in ’24 and ’25, do you expect the Century Complete mixed percentage of communities to begin to increase again, or should we expect it to be flat from here or fall as a percentage of the overall?
Scott Dixon: No, we’ve been — if you look at the past few quarters Century Complete has been 38%, 39% of our overall closings. I would expect that we get back to those same levels. It was just when we look at it, the homes that we had on our Century Complete brand were just less this quarter than what we had on our communities brand.
Carl Reichardt: Okay, so more of an anomaly. Okay, great. Thanks. And then, last one, can you just talk a little bit about the non-core investment that you impaired? What was it and why did you impair it?
Scott Dixon: Yes, sure, absolutely. It was an investment we had in a startup company called Diamond Age, which is a 3D printing company. And we went through an exercise from the accounting perspective every quarter of taking a look at updated data points, and that flushed itself through in the charge this quarter.
Carl Reichardt: Great. I appreciate it, Scott. Thanks very much, guys.
Scott Dixon: Absolutely. Thank you.
Scott Dixon: Thank you.
Operator: [Operator Instructions] Our next question will come from Alex Barron with Housing Research Center. Please go ahead.
Alex Barron: Hey, guys. Congratulations on the quarter. I want to testify the incentives — I’m assuming a lot of buyers are using some form of rate buy-down or forward commitment, but I was curious if you guys could spell out what percentage of the buyers actually take advantage of something like that.
Dale Francescon: Yes, absolutely, Alex. Obviously, from our buyer pool, from really focusing on that first-time home buyer, it’s the substantial majority. It’s above 75% of our buyers will take advantage of some level of a mortgage incentive.
Alex Barron: Got it. And as we look at what’s happened so far this month, rates up, I don’t know, 40, 50 beats versus last quarter, is your sense that you guys will increase the incentive to kind of keep the sales pace momentum going or that rate you offer people will go up along with market rates?
Dale Francescon: The rate that we’ve been offering has trended up as we have seen rates go up, so that we’re basically keeping a similar spread between market and the rates that we’re offering.
Alex Barron: And so far you haven’t noticed whether it’s affected sales pace much?
Dale Francescon: Yes, so far we don’t see — it has not, obviously the month is not over yet, but right now it has not.
Alex Barron: Okay, that’s great. All right, that’s all I got. Thank you.
Dale Francescon: Thank you.
Scott Dixon: Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Dale Francescon for any closing remarks. Please go ahead.
Dale Francescon: Thank you, Operator. And to our team members, thank you for your hard work, dedication to Century, and commitment to our valued homebuyers. To our investors and everyone else on the call today, we appreciate your continued support and look forward to speaking with you again next quarter and sharing our continued progress.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
