Michael Rehaut: Thanks. Good morning, everyone. First question, I just wanted to zero in a little bit, if possible, on the pricing trends. As you mentioned before, you said that you had increased prices maybe in about 50% of your markets. Just wanted to get a sense between the reduction or moderation in incentives that you’ve seen so far year-to-date as well as maybe between that and some of the base price increases. If you could give us a sense of how much pricing – net pricing has improved from 4Q end to 1Q end?
Ryan Marshall: Yes, Mike, we haven’t given that level of granularity. I think the previous question that Bob just answered really highlighted what we’ve seen, which has been a build of kind of sales momentum if you remember going back to November, December of last year. The market was still pretty tough, but we did comment on our year-end report that we had in January that we are starting to see some momentum building in the back half of January or December and into January, we’ve seen that continue, and that’s allowed us to pull back on incentives. It’s allowed us to take some very moderate price increases, but it’s definitely a change in kind of the sentiment that we’re seeing from buyers. I think some of that is interest rates stabilizing.
I think some of that is the interest rate incentives that we have done, I think a lot of that is kind of buyer psychology. And then the biggest thing as I go back to, we’ve got a housing shortage in this country, and that hasn’t changed. And so in the places where we’ve been able to demonstrate value, which we’ve worked very hard to do, we’re seeing some nice momentum on the sales floor. And I think you’ve heard from us, we’ve seen that continue into April. And that’s allowed us to be optimistic and bullish with our forward start projections and some of the things that we’re anticipating to be able to do for the balance of the year.
Michael Rehaut: Great. I appreciate that, Ryan. I guess secondly, looking at the gross margins for the second quarter, you’re expecting about 100 to 150 bps of potential contraction, just wanted to get a sense of if that is just due to the lagged impact of higher incentives from the back half of last year. And if that – because I believe you also mentioned that – if I heard right, and apologies, if I didn’t, but that you are also going to see the benefit of lower lumber costs in the second quarter. But if the driver is that lagged impact of higher incentives from back half of ‘22, do you feel that that’s mostly – will have mostly played itself out by the second quarter, or could there be incremental negative impact in the back half of ‘23?
Pablo Shaughnessy: Well, we haven’t given a guide beyond Q2. And there is a lot of moving parts in the market. The reason I mentioned that we are only going to go out one quarter, we have got lumber. It’s ticking up again. That will be later in the year or into next year. It’s worth that while looking at the cost environment, we still see inflation. We think that it’s a little bit lower in rate than we probably projected at the beginning of the year, but we are still feeling cost increases and labor in particular is pretty sticky. We have talked about that. And obviously, if you look at the production cycle, our land is typically more expensive as we move through time. So, we have got incremental cost against a relatively flat at some points during the last two quarters, decreasing pricing.
So, I think that’s what’s actually resulting in the margin decline year-over-year. The strength in the market that we saw last year produced largest we had never seen before, Mike. And this is just a reflection of the reality that costs are up, and we haven’t been able to offset all of those to-date.
Michael Rehaut: Okay. Great. Thank you.
Ryan Marshall: Thanks Mike.
Operator: Our next question comes from Matthew Bouley at Barclays.
Matthew Bouley: Good morning everyone. Thanks for taking the questions. So, just thinking about kind of the strength of sales pace during the quarter, kind of look back on the quarter, obviously there was a period where mortgage rates reached over 7% again. We had the sort of regional banking crisis where perhaps there was some impact on housing activity for a few weeks. I am curious from Pulte’s perspective, did you see kind of impacts to your own sales pace during those periods, any kind of color on sort of the cadence through the quarter? And as we have kind of moved past that, how is sales pace trending to sort of exit March and into April relative to some of those uncertain periods during the quarter? Thank you.
Ryan Marshall: Yes. Matt, what we saw in the quarter was a strengthening of sales pace as we move January to February, February to March. Sequentially, sales paces got stronger. And then we have seen April continue to the first 3.5 weeks, three weeks of April continue to perform at a really strong level. So, we are pleased with what we are seeing. To your point, I think in certain markets, particularly on the West Coast during the banking, regional banking crisis, I think certain buyer groups in certain cities were probably more impacted psychologically than others. I think most of the things that we were seeing resulting from that have dissipated and we are continuing to see good momentum on the sales force.
