Douglas Yearley: Sure. The — so let’s start. Supply chain is improving. Cycle time is improving as contractors have more capacity. And costs have stabilized, except for lumber, which is our biggest material cost, has come down significantly. So there’s a very nice tailwind and with lumber. It’s flattened out in the last month or so, 6 weeks maybe. But before that, it was coming down pretty rapidly every week. We do believe, as the year progresses that there will be other costs, both labor and materials that will be coming down. But right now, costs are stabilized, except for lumber, which is a nice tailwind. So stay tuned for the balance of the year. We are actively talking to trades the normal conversation is the trade that didn’t have capacity now comes and says, “Hey, I’ve got an extra framing crew or 2 that could use some work.” That is the opening to get a price concession. And so that is the beginning of the process of seeing costs come down.
Operator: And the next question comes from John Lovallo with UBS.
John Lovallo: The first one is on just going back to SG&A, down $15 million year-over-year on a similar revenue base. And I know you talked about broker commissions and a few other things done. But what are some of the more structural cost-saving plans that you guys have been successful with?
Douglas Yearley: Headcount. We’re trimming the firm. We’re learning how to be more efficient with less people. As we have retirements, we’re replacing from within, we’re promoting from within, without needing another person. We’ve gone through a very difficult, thoughtful round of cuts in the last 30 days. We’re — we have a plan for — to become even more efficient with headcount and some other initiatives in the firm, but it’s primarily headcount.
John Lovallo: Got it. Maybe if I could just follow up on that. Is there a risk that you’re going to negatively impact growth if things were to pick up here given those headcount reductions?
Douglas Yearley: No.
John Lovallo: Okay. Okay. Great. And then second question is just digging into buyer mentality and psych here, which is pretty interesting. I mean, it looks like there was a slight step-up in cash buyers quarter-over-quarter, at least as a percentage. And you mentioned some fear of missing out, maybe more confidence. But in general, from what you’re hearing, do you think folks are just getting more accustomed to higher interest rates?
Douglas Yearley: Yes. So cash went from 20% of our buyers to 23% in that we expected. It’s common sense, right? As rates go up, if you can afford to write the check, you write the check. But I do believe, as we thought, it would take some time for the buyers to adjust to a higher rate environment. And that’s exactly what happened. It happened back for the mid-90s to the mid-2000s, which was good market, we were at 6% plus mortgage rate environment. It’s been many years since we’ve been there, and now we’re back there and it took some time. And I think that’s the primary — we have great fundamentals. I know I went through them the migration trends, the demographics with millennials and boomers, the pent-up demand, a tight resale market, 3 million to 6 million too few homes in this country.
that big demand supply and balance has been there for a decade. All of that can’t be ignored. And as the buyer took a pause and absorbed the higher rate it appears they’re coming back out. That’s what we’ve seen over the last 7 weeks.
Operator: And the next question comes from Susan Maklari with Goldman Sachs.
Susan Maklari: My first question is around the commentary that you gave of increasing your spec construction just given that are looking for quick move-in homes. Can you give a bit more detail on the number of specs you have and how you’re thinking about adding supply as we go further into the spring?
