Mark Yost: Phil, I think part of the reason we’re opening up capacity and expanding capacity in essence, running with excess capacity a little bit is because when builders come to us and need product, it’s a different type of order process. They need generally bulk orders. So they’ll take either 10% or 20% or 50% of a plant’s capacity with their home needs. So I think we need to run a little bit in excess to make sure we can supply that channel adequately, definitely. So I would say that’s the main bottleneck is making sure we have available capacity to them that channel and to make sure that we’re also taking care of our existing customers and making sure they have the product available to them as well. Supply chain is pretty much cleared today, maybe some HVAC issues still that are lingering, but that would be the main, I would say, most of the supply chain and labor issues are behind us.
Phil Ng: Super. And just 1, last 1 from me. Any color on how chattel loan rates have kind of performed and reacted to this current environment, call it the last few months? Certainly, any color on the spread side would be helpful?
Mark Yost: The chattel loans have performed surprisingly well. I think the traditional 30-year mortgage last I looked this week was 6.4% or 6.5%. We’re seeing for good credit score chattel, 700-plus FICO score and 10% down. We’ve seen loans at about 6.7%, so about a 20 or 30 basis point spread versus traditional 30-year mortgage for good quality customers. If the customers are running closer to a 600 FICO score, only 5% down, then you’re seeing spreads are probably 1.5% to even up to 3%, depending on how low the FICO score is. So they could be in that, 7.5%, 8%, 9% range, depending on their credit quality. But for good customer buyers, we’re seeing a very tight spread.
Phil Ng: Has that spread come down — or it’s pretty constant, call it, last 3 to 6 months?
Mark Yost: I would say — yes, I’d say it’s pretty consistent to where it’s been.
Operator: Our next question is from Jay McCanless with Wedbush Securities.
Jay McCanless: Sorry. Can you hear me now?
Operator: Yes.
Jay McCanless: So Mark, you’ve shown the Genesis homes now at the Orlando show and then the Vegas show last week. I guess maybe any big difference that you heard from the builders on either side of the coast and where, I guess, given the affordability that Genesis brings to the table, do you think there’s, more opportunities out west where you just naturally have higher prices? Would love to get your take on that.
Mark Yost: Yes I think that the Genesis product actually kind of serves builders nationwide, to be honest with you, Jay, depending on what area of the country they’re in. I would say that the interest in activity at the current show in Vegas was much higher, and it was real interest. I would say, customers we had numerous amounts of customers who not only provided their information, but actively have solicited on projects that they’re working on. We’re very interested in quoting out specs. So it wasn’t just a walk-by interest. It was — during the show, we actually saw numerous builders actually starting to quote out our product and understand if it works for their existing pipeline of subdivision projects that they’re working in.
So I think given the interest rate and affordability challenges the end consumers are facing, along with the increased interest rate challenges and cost of capital challenges that builders are facing, I think it’s a win-win with the speed and the availability of the product. And I think they see the same.
