And we’re certainly seeing opportunity to do well on rate and maybe a little better than our guidance implies. But overall, we’re kind of assuming it’s going to be just kind of an overall similar type market, whether it’s unemployment, whether — and all the other macros that we’re looking at right now.
Operator: Thank you. We now have Tony Paolone of JPMorgan. Please go ahead, when you are ready.
Tony Paolone: Thank you. You’ve talked in the past that you’ve built Invitation Homes to run materially more than the 83,000 homes you currently own. And so I’m just wondering, what are the — what’s the biggest gating factor to turn external growth back on in a more meaningful way? Like is it really your capital cost? Is it the selectivity of what you want to buy? Or do you just think prices are going to come down, and you don’t want to be in front of that?
Dallas Tanner: It’s not the latter. I mean, I think last year was more of the latter, Tony, in terms of — we started to slow down our buying in April or May significantly because we were worried — there’s a lot of unknowns when the Fed started moving rate as fast as it did. Now I think we’re all happy to say nine months later, we haven’t seen a degradation in home prices that would suggest that there is huge doom and gloom on the horizon. It’s really the opportunity set. Remember, we were able to build really significant scale over time in an environment where you had years of resale supply on the market and a cost of capital that was pretty attractive. In today’s environment, we have less supply. We see kind of an uncertainty in how we even view kind of our own balance sheet capital right now.
We’re not pleased with where the stock is currently trading. And lastly, we see builders being a little more cautious, and there’s local regulatory restriction. Now all that sounds negative. It’s actually a really good thing for the demand side of our business, as you guys know. We are not seeing any degradation in top of funnel. In fact, to Ernie’s point to what Charles said earlier, we’re really bullish on the prospects of both the quality of the resident. We’ve seen a tremendous increase in, call it, the underwriting standards of our resident over the last couple of years and the amount of demand we have for the product. We obviously want to grow. We would love to grow. I think we’ve gotten pretty good marks of being a prudent capital allocator over time.
And I think we got it right in large part by being in the markets that we are with the type of scale that we have. Tony, we’re going to continue to find ways to build new product and to bring more product into the marketplace. We made that commitment about 18, 24 months ago. We’ve got over $1 billion, call it $1 billion, $1.5 billion in our current pipeline. And we’re going to find ways to continue to build and create strategic ventures with partners that are on the homebuilding side so that we can start to ramp that up over the coming years. But we also want to continue to be opportunistic and buy in a one-off nature. The one thing that I think will be interesting and we’re keeping an eye on is over the next couple of years, with interest rate costs being where they are, I think there are going to be some opportunities for additional M&A with small to midsized portfolios as operators consider their options around recapping or not.
