Jay McCanless: And then one last one. I know you said in the guidance that you expect the gross margin to go up sequentially. Is there going to be, in terms of the actual closings for the next two quarters, are you thinking it’s going to go up from 2Q to 3Q? Or should we expect a dip just because of what you talked about with starting less homes at the last half of 2022? How should we expect the quarterly cadence on closings to go?
Dale Francescon: I would expect the latter, based on your comments, so that you’d see a bit of a dip in Q3 and pick it up again in Q4.
Jay McCanless: Okay, great. That’s all I had. Thanks for taking my questions.
Dale Francescon: Thanks Jay.
Operator: Our next question comes from Alan Ratner with Zelman & Associates. Please go ahead.
Alan Ratner: Hey guys. Good afternoon. Thanks for taking my questions.
Dale Francescon: Hey Alan.
Alan Ratner: So, apologies for the somewhat technical modeling question, but I’m trying to figure out some math here and hoping you can clarify it for me. So, I think you mentioned that you guys expect to see a typical seasonal pullback in order activity in the back half of the year, which we’re hearing from a lot of builders. But I’m struggling to reconcile that with your model right now, where you’re effectively selling homes at or close to completion. And your closing guide for the back half of the year implies pretty steady closing activity, at least back half versus first half, kind of averaging 2,100, 2,200 closings per quarter? Why wouldn’t your orders kind of be in a similar range? And if it were, to be in a similar range, that would imply kind of flattish with the first half of the year?
Dale Francescon: Yes, I think I’m making sure I’m trying to follow your math, and happy to discuss it after the call as well. But as I look at it with when we have homes completing and when we expect to be selling them, with a little bit of seasonality occurring here in the July and August months, and we’ll see sales pick up again into the fall, we think that where our backlog is today, 2,002 homes, and that sales cadence, we think that we still hit the closing guidance whether — to be in that range of 8,300 to 9,000 homes.
Alan Ratner: Got it, okay. Yes, we can talk through the math later.
Dale Francescon: Okay.
Alan Ratner: But I appreciate that. Second, on the margin, obviously you’re expecting sequential improvement over the next couple of quarters. If I think about your incentives right now, which are running about 600 bps on orders versus 900 bps on closings, is that the easiest way to think about how much improvement you expect kind of 300 bps or so over the next couple of quarters, or are there other moving pieces in there that I need to consider?
Dale Francescon: Well, there’s moving pieces on directs as well, as I pointed out, but I think that would be at the top level at that 300 bps.
Alan Ratner: Top, meaning that would be at the high end of what you would expect?
Dale Francescon: Yes, exactly.
Alan Ratner: Okay, got it. All right. That’s helpful. And I guess just on those direct comments, I’ve been personally a little surprised. It seems like many builders that have seen nice cost reductions expect those reductions to remain in place, even as starts are accelerating across the industry. Your tone, to me, sounds a little bit more realistic and aligned with how I’m thinking about it, that with some of these pretty significant increases in starts, it’s possible certain items might see a bit of a reversal there. I’m just curious if you’ve seen any indication of that up to this point, any particular markets or trades that you feel like are starting to get a little bit stretched or come back for some price increases, or is that just more kind of prospective thinking on your part at this point?
