Stephen Kim: Great. Appreciate it guys.
Glenn Keeler: Thank you.
Operator: Our next question comes from Truman Patterson with Wolfe Research. Please go ahead.
Truman Patterson: Hey, good morning everyone, thanks for taking my questions. First question earlier in the year all builders were expecting some pretty nice cost tailwinds this year. I’m just hoping you could give an update on kind of the, the cost trends here, here in the back half of 2023, labor and materials and given the recent rate move, perhaps the sequential softening you’re seeing. Do you think there’s a chance to perhaps push back on any labor, material cost going into 2024 or it’s just kind of the underlying inflationary pressures, likely to keep everything kind of elevated as we sit today?
Glenn Keeler: Good morning, Truman, this is Tom, I’ll take a little bit of that one. We’re feeling really good that the market is normalizing relative to supply chain, and trade availability, and labor supply it’s got tighten constraints, but it is beginning to normalize. On the cost front, we are largely able to maintain the cost reductions we achieved in the first couple of quarters. So we feel really good about that, and that’s our goal going forward into 2024 is to really focus on maintaining that cost structure, continuing to focus on cycle times, and just capitalizing on a more normalized market.
Truman Patterson: Okay.
Douglas Bauer: Yes, Truman, I would add. This is Doug. Going forward, I, I think it will continue to be very normal. I don’t think interest rates are going to drive cycle times or costs one way or the other. Obviously, that will be driven more by starts and velocity. So we, we’ve seen as Tom said, a very steady market and it’s also showing up in our customer satisfaction scores that are, are going up very nicely. And that’s, that’s very important in our business.
Truman Patterson: Okay. Okay. Got you. And then hoping you all could give an update on kind of the Carolinas, Dallas expansion, if you will, as well as the recent Utah entrance. And given your balance sheet a tougher, just banking lending environment for smaller privates, could you just, just discuss the appetite you have for M&A in the current environment? I think you mentioned you’re looking at Florida and Charleston, would that be Greenfield or potential M&A opportunity?
Douglas Bauer: Yes, Truman, this is Doug. Right now we’re looking at both, I would tell you that the M&A environment is, is a little limited. And so we, we’ve been pursuing more of the organic strategy as we’ve mentioned in Utah. We’re actively recruiting for Florida and Charleston. And that could take along with an M&A opportunity within the local market. So we’re looking at both, but we’re going to pursue organic, which is something we can control and, and be very disciplined about our growth. So that, that’s, that’s kind of a current update.
Truman Patterson: All right. Thank you all.
Operator: Our next question comes from Alan Ratner from Zelman & Associates. Please go ahead.
Alan Ratner: Hey guys, good morning. Thanks for taking my questions. First question, I guess on capital allocation. You guys have done a really good job of taking advantage of what I’m sure you, you feel is an unjustified discount here on your stock price with the buybacks. You do have a maturity coming up next year, and obviously with rates climbing up here. I was just curious, if you can give us an update on your thinking on the balance sheet. Is the plan to pay down that maturity next year? Anything else that you’re contemplating with that?
Glenn Keeler: Hey, Alan, this is Glenn. Good question. Right now we’re putting ourselves in a position to pay those bonds off next year. With the current bond market and the rates, it’s not too attractive to refinance. And so, we plan on deleveraging and paying those bonds down. But as you can see, we have ample liquidity to do that while still investing in land and, and being active in our share repurchase program.
Alan Ratner: Got you. That makes sense. The second question on, on the margin guide some of your peers have guided for some sequential pressure on margin in the fourth quarter with the expectation or assumption that incentives might creep higher. And I know you had similar commentary in the press release, but your guidance is, is pretty flat sequentially and it sounds like there hasn’t really been any notable shifts in your incentives thus far in the quarter. So can you just explicitly highlight, what is your expectation for incentives for the quarter embedded within your guidance right now?
Glenn Keeler: Yes, like we discussed so far in October, we’ve seen consistent with the third quarter from an incentive perspective. Now, if rates stay elevated, like we said in our comments we’ll look at that and we’ll look to incentivize certain communities that aren’t meeting our sales expectations. But overall we’re going into the, the fourth quarter with a strong margin in backlog, and that supports that guidance. And we don’t — right now our sales are really to generate deliveries next year in 2024 largely. And so that shouldn’t impact, our Q4 margin.
Tom Mitchell: Yes. Alan, the other thing. This is Tom, this is Tom. Just to add a little bit more color there, of course we’re focused on target absorptions for our business plan and, and we are right on that seasonality that we normally built into our, our business plan. We’ve got 86% of our fourth quarter backlog locked those that are going through our Tri Pointe Connect. And so we feel good about the fourth quarter coming up.
Alan Ratner: Great. Appreciate that, Tom. Thanks guys.
Tom Mitchell: Thanks, Alan.
Operator: Our next question comes from Tyler Batory from Oppenheimer & Co. Please go ahead.
Tyler Batory: Thank you. Good morning. My, my first question on the impact of, of higher mortgage rates. What do you think about a possible lag effect from, from higher rates, I mean in the past when you saw rates spike, was traffic or sales pace impacted right away or does it take a few weeks to filter through. I’m just trying to get a sense of maybe for the, for the industry or maybe for you as well perhaps the full impact of this run to 8% here might not have been told yet.
