Jessica Hansen: And as a reminder, we sell and close generally 35% to 40% of our homes intra-quarter, so you never see those in our backlog that we’re reporting at a quarter-end anyway, which is why Bill is alluding to home starts and our homes in inventory being a better driver and an indicator of what we’re going to close in a forward period.
Mike Rehaut: Great. Thanks so much.
Jessica Hansen: Thanks, Mike.
Operator: Thank you. The next question is coming from Matthew Bouley from Barclays. Matthew, your line is live.
Matthew Bouley: Good morning. Thank you for taking the questions. I wanted to ask about lot costs. I think you said lots on a per square foot basis were actually flat sequentially, which is maybe a little surprising, given the shortage of lots out there, as you alluded to. Could you speak to a little around what’s implied near term in your margin guidance around lot costs? And then just sort of more broadly, how are you thinking about managing inflation in lots going forward? Thank you.
Mike Murray: What we’re seeing today in the closings are lots that were contracted and acquired quite some time ago and coming through. So, we’re not seeing a lot of cost pressure coming through. Going forward, along with the lot scarcity, we’re expecting to see lot costs coming through in forward margins at a higher level. There has certainly been inflation in land and in lot development costs and in finished lot prices. So, we expect to see that, but that’s factored into our guidance and the way we’re planning for the business next year.
Matthew Bouley: Okay. Got it. Thank you for that. And then, secondly, just on the topic of mortgage rate buydowns, I’m curious if you can kind of educate us a little around how that dynamic may change depending where prevailing mortgage rates go. So, if we were to see a rise in mortgage rates from here, for example, what level or what ability do you have to — what’s kind of the maximum level of rate buydown, I guess, you could do? And conversely, if rates were to come down, would you continue to buy down rates by the same amount, or would you actually reduce kind of the size of your mortgage rate buydowns? Just curious around how all that may play out. Thank you.
Paul Romanowski: Yeah. The rate buydown for us has been an effective incentive and to help us provide, as we’ve improved our cycle time as well, a certainty of close date and a certainty of home payment. And we have stayed roughly a point below the market, and we’ll have to measure that as we move forward depending on where rates move, whether that be up or down. But we have found it to be our — one of our most effective incentives, and we have been consistent in that execution and we’ll continue to explore that as the interest rates move on a go-forward basis.
Matthew Bouley: All right. Well, thank you, and good luck.
Operator: Thank you. The next question is coming from Eric Bosshard from Cleveland Research Company. Eric, your line is live.
Eric Bosshard: Thanks. The gross margin progress in the quarter was notable and you talked about, I guess, a bit more progress in 4Q. I’m curious if you could help us get a sense of how we should be thinking about the path of gross margins from here. You’ve done a good job historically outlining ranges. But in the world, which seems like it’s stabilizing for you now, how should we think about the range of path of gross margin?
