Good morning, and welcome to the Toll Brothers First Quarter Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Douglas Yearley, CEO. Please go ahead.

Thank you, Jason. Good morning. Welcome, and thank you for joining us. With me today are Marty Connor, Chief Financial Officer; Rob Parahus, President and Chief Operating Officer; Fred Cooper, Senior VP of Finance and Investor Relations; Wendy Marlett, Chief Marketing Officer; and Gregg Ziegler, Senior VP and Treasurer. Before I begin, I ask you to read the statement on forward-looking information in our earnings release of last night and on our website. I caution you that many statements on this call are forward-looking based on assumptions about the economy, world events, housing and financial markets, interest rates, the impact of the pandemic, the availability of labor and material, inflation and many other factors beyond our control that could significantly affect future results. I will begin by sharing some thoughts on current market conditions and sales, along with the challenges we are seeing on the production side and how we are addressing them. I will then turn it over to Marty to discuss the numbers and guidance in more detail. Our first quarter results were solid. Net income and earnings per share rose 57% and 63%, respectively. And home sales revenues grew 20% in dollars and 9% in units compared to last year's first quarter. Our adjusted gross margin of 25.6% in the quarter was 270 basis points better than last year's first quarter. And our SG&A expense as a percentage of home sales revenue improved 150 basis points over last year. At first quarter end, our backlog stood at a record $10.8 billion and 11,302 homes. Due to the strong demand we continue to see in the market and the good visibility that our backlog provides, we are reaffirming all of our full year guidance. We are pleased with our sales results in the first quarter, as we saw…

Thanks, Doug. In our first quarter, we delivered 1,929 homes at an average price of approximately $875,000, generating homebuilding revenues of $1.69 billion, which was up 9% in units and 20% in dollars from 1 year ago. Settlements, came in 71 units below our expectation due to the supply chain disruptions, labor shortages and municipal delays that Doug mentioned. We felt the greatest impact in January, the last month of our quarter as the effects of the spread of Omicron were most acute. Fortunately, Omicron and the pandemic now seems to be waning. Our first quarter pretax and net income were $200.8 million and $151.9 million, respectively, both up approximately 57% compared to $127.4 million and -- I'm sorry, $96.5 million, respectively, in the first quarter of 2021. Earnings per share in the first quarter were $1.24 per share diluted, up 63% compared to the $0.76 per share diluted that we earned 1 year ago. The net income and earnings per share growth percentages were approximately triple our revenue growth percentage growth. Our first quarter adjusted gross margin was 25.6% compared to 22.9% in the first quarter of 2021. The 270 basis point improvement reflects the strong pricing environment over the last year. It also includes the impact of elevated lumber prices from last spring in this quarter's closings. We continue to project an adjusted gross margin of approximately 27.5% for the full year. We expect adjusted gross margin of 25.5% for the second quarter of fiscal year '22, as the impact of elevated lumber prices from last spring continues. This will be followed by a ramp-up in our gross margin in the third quarter and a greater ramp in our fourth quarter. SG&A as a percentage of revenue was 13.4% in the first quarter compared to 14.9% in Q1…

Thanks, Marty. This month, FORTUNE Magazine named us the #1 World's Most Admired Homebuilding company. This is the 7th time we have received this high honor. I would like to thank all of our Toll Brothers team members for achieving this tremendous recognition. They continue to demonstrate their dedication to our brand and our customers, and for that, I am very proud and very grateful. As Toll Brothers enters its 55th year in business, I'm excited about the current market and the long-term prospects for our company. Now let me turn it over to Jason for questions.

[Operator Instructions]. Our first question comes from Anthony Pettinari from Citi.

This is Ashu Sanan [ph] on for Anthony. I guess my question is, the last time we saw rates rising in 2018 time frame, your sales pace did slow down meaningfully. So I was just wondering what were maybe some of the early warning signs in 2018, 2019 time frame that were showing the demand than maybe we should be looking for around now. And then I know you haven't seen any impact on demand yet, but have any of those warning sign metrics started to weaken for you at all?

Very good question. The warning signs are web traffic, foot traffic. And right now, web traffic and foot traffic is up significantly.

Okay. As a follow-up, I just want to -- so thinking about your sales pace in 2021, you sold maybe a little over 3 homes per community per month in the quarter, similar to that. And then I think for the -- for 2Q, you expect to do the same. So I'm just wondering, looking out for the rest of the year and then maybe even beyond that, is that sales pace sustainable, maybe like a new normal? Or should we think about that 10% growth in community count coming more maybe at the cost of a little bit more of a normalization in sales pace?

So right now, we're selling at about a pace of 37 homes per community per year, and we're settling at a pace of about 35 homes per community because of all the -- everything that all the builders have talked about and what we talked about in our prepared comments earlier. We can and we will get the settlement pace higher as supply chain labor issues, improve over -- I think it's going to be the later part of this year. As I talked about, we're going to be focused on more starts this quarter. There's about -- we're about 600 spec or what we call quick move-in homes behind because so many of those were sold over the last 1.5 years through the heat of the market. And we are committed to get many more homes started in the second quarter, and that's why we put over 50% of our communities on allocation. And so longer term, we are very comfortable being in the high 30s in both a sales cadence and a delivery cadence. And so community count will certainly contribute to our growth, but there are opportunities as supply chain labor settles down for us to, we believe, both sell and deliver more homes.

Okay. That's very helpful. I'll turn it over.

The next question comes from Stephen Kim from Evercore ISI.

Really great info regarding the buyers and all the factors you ran through about demand not being pulled forward. So thanks for that. One of the things that I wanted to -- that our model is spinning out that I thought was interesting is your -- we have your net debt based on what we see here, easily moving back down into the low 20s. And my -- I guess my question was, in your outlook for return on equity, about 23%. Can you give us a sense for what kind of range of net debt to cap you're expecting at the end of the year? In addition, you've talked about specs here a little bit more. You're one of the few builders that doesn't actually give us a detailed breakdown of the number of homes you have under construction at any point in time. I was wondering if you could give us that number, what it was this quarter and what it was in the year ago period?

So Stephen, with respect to the debt question, I think you're directionally accurate. I think we're interested in operating in the low to mid-20s, but the timing of land opportunities or builder acquisition opportunities can always impact that from quarter-to-quarter or from year-end to year-end. We're encouraged by the fact that our plans have been shared with Moody's, and they moved us up to investment grade. And so we feel very comfortable operating in those levels with the liquidity we have, the cash generation we foresee and the growth opportunities we have on balance sheet or in process. With respect to your second question, which is the number of starts. I don't know that we have that with us this morning. As Doug mentioned, a lot of our starts in the second quarter will be to replenish our depleted spec inventory. So we expect to start in the second quarter in the neighborhood of 3,400 to 3,600 units.

And Stephen, in the first quarter, we did start about as many homes as we sold. But last year, when we were selling a bit more homes than we were starting and that, again, is one of the main reasons that we have increased allocations for the moment. We are going to replenish the spec count. And so this quarter, as Marty said, we will be starting more homes than we sell, but those homes will -- in fact, they should have a shorter construction cycle time because at least in the early stages of the home, we don't have a client, and we're able to move faster, but they will, we believe, deliver in the time frame as if they had been sold. And if this market continues, we are hopeful that maybe there's even more margin in those houses because they're sold a bit later in the cycle time.

Yes, no doubt. One of the interesting things that times like this brings is the higher margin on specs. Second question I had for you relates to the fact that you're trading pretty darn close to your book value, which as I've thought about that, one of the things that we've analyzed is how much of your land that you own, how many lots you own, likely reflect pre-pandemic pricing. The analysis that we've run suggests that -- easily all of it could theoretically have been -- have had prices that were negotiated pre-pandemic. But there's two assumptions in there. I was wondering if you could comment on those. One is that your land values rise more significantly even than the rate of home price appreciation that land values rise, I've heard 2x or whatever of home price appreciate. I wanted to sort of check that. The second thing is, you have options and my understanding is that some of those options have some form of escalator, but the escalator usually is sort of capped out, right? So when you have this period where land values have risen radically since the last 2 years, your escalators don't move up at the same rate. So you really do have an embedded arbitrage on anything that you had as an option at the time of the pandemic. Are those two assumptions roughly correct?

It's a very, very complicated answer, and I don't want to bog down. But let me start with the land that we own that was contracted for pre-pandemic, that number is 77% of the land we own was tied up pre-pandemic. With respect to the deal structures, most of our deals have what we call kickers -- no kickers. So we pay for the land, we may not pay all upfront. With our obsession with capital efficiency, we may be paying it over time. There may be an interest rate associated with paying over time. Certainly, with a land banker, there's an interest rate associated with taking that land down later. But most of our deals don't have a kicker, which means a land seller is participating on the back end with our success. However, there are some deals that do have a kicker, where they are either having a revenue share on the back end based on a small percentage of the price of the home ultimately sells for or in a very, very, very limited case, there may be a profit participation where they have to get into our books and understand how we calculate profit and we have some arm wrestling over accounting and they actually get to participate on the profit side. So one is revenue, which is a percentage of the home price itself and the other would be a share of the profit made, but those are the exceptions. Most cases do not have that. But to your point, when they do have a revenue or profit participation, we have the outsized component of that. So we are benefiting far more than our seller as our prices or our profitability goes up.

The next question comes from Alan Ratner from Zelman and Associates.

Doug, I'd love to follow up, I think, on a comment you made to a prior question about the supply chain, and I think you kind of made a hopeful comment that as the year goes on, maybe things will at least stabilize or maybe even improve a bit. And I'm just curious your thoughts because you guys seem to be following a similar playbook that a lot of the industry is right now in terms of limiting sales, ramping spec starts. Obviously, community count is going to be growing a lot. So I guess where I struggle a little bit is and I'd love to hear your thoughts are why would the supply chain stabilize if the industry is all kind of trying to ramp up the volume of specs over the next 3 months, 6 months? Community count is going to be growing double digits for just about everybody over the next 9 months. What is the catalyst that would actually cause the supply chain to stabilize or even improve?

Yes, it's a great question. And I just want to start by explaining that. We haven't modeled for any improvement. We -- the guidance we've given, in fact, we've increased our contingencies and our building costs recently to be more careful. So all the guidance we're providing and the way we're running this business is assuming that there will continue to be significant stress and there will be continued to be significant pricing pressure. With that said and returning to my comment I made a few minutes ago, I'm just looking at the world today. My -- January, 9 million Americans called in sick, that's off the chart to the normal, I don't know, 2 million or 3 million pre-COVID. I think the prior peak to that was a year ago when it was 6 million. January was a really, really tough month. We felt we couldn't get building inspections because the inspector was home. We couldn't get COs because the town clerk, who processes the CO was home. Our employees were home. Truck drivers were home. I saw it in my kid's school. We saw it in our personal lives with friends and family, and that is changing dramatically. Mass came off my kid's last week, going to school. There's a lot that's changing rapidly that just gives me some optimism that things will get -- be more normal. The L.A., long Beach port, you don't have 100 freighters sitting in the harbor. You don't have thousands of containers sitting on the dock. I've heard the big suppliers are now beginning to talk about some improvements they're seeing in their opportunities to run their factories full speed to get the truckers to transport. And so Alan, that was the extent of it. I mean, I agree with you. The builders are growing, there's a lot of action out there. The market continues to be really strong. And so of course, that's the other side of the equation. But I am hopeful and cautiously optimistic using it all term that as this year progresses, we're going to see a bit of a more normal, although still somewhat stressed production environment.

I think to follow on to that a little, Alan, we are offering product that we know is available. We are choosing product in these spec homes that we are building that we know is available. And we are narrowing to the most popular items what is offered in our design studios. And that actually marries with what the manufacturers are producing. They've narrowed how much they produce to drive efficiency. .

Got it. Appreciate the comments there. I know it's a tough environment to predict here. So it's helpful to hear how you're thinking about it. Second question, I would love to just dig in a little bit in terms of the mix of your business. I think one of the areas that perhaps there was some optimism on in terms of navigating some of the extending cycle times was the growth in affordable luxury and the growth in newer markets where perhaps cycle times historically have not been quite as extended as the coast. So I'm curious if I look at your average price growth, it's been very strong, kind of consistent with the broader industry. So it doesn't seem like there's really been much of a mix towards more affordable product or kind of more affordable markets, your cycle times obviously have not yet stabilized. So should I interpret that, that you're actually just seeing incrementally stronger demand from the luxury higher-end price point? Or is that not the correct interpretation and there's something else going on underneath the surface there?

No. We're committed to the affordable luxury business. We're committed to these new markets that tend -- as you point out, tend to be a bit lower priced. There's a lot less city living in '22. There's almost no city living deliveries in '22 because of the timing of buildings and our intentional decision to slow that business down as COVID hit. And the move out of city living has ramped into active adult, age-restricted primarily. But we're raising prices everywhere. So don't read into this $1 million-plus sales price over the last 2 quarters to suggest that it's coastal. It's very expensive places. We entered Boise 4 years ago, selling houses at 3.25 and our average house in Boise now is 6.50 guys, plus or minus. We -- and I can tell that kind of story to many markets around the country. There's a -- I guess there's a bit of a new definition to affordable, and many of these markets are seeing equal or higher percentage increase in sales price to some coastal regions. And then when you mix it all together, the price is coming out over $1 million. But we like the mix. We -- much of the land we're buying continues to be in these new lower-priced markets where we will be able to offer more affordable homes. But as I said, those homes are going up just as fast or faster than other areas. So it's no change in strategy. It's just prices going up everywhere.

All right. Appreciate the thoughts.

The next question comes from Deepa Raghavan from Wells Fargo.

A pretty broad one for me. If your 2022 is more or less locked in at this time, just given your backlog visibility, et cetera, what's driving that wide range in guide? Is that -- are you waiting for spring selling season or supply chain still the governor to the high end, low end? Any thoughts there?

Yes. Go ahead, Marty.

So I think our guide for deliveries is a width of 725 units, right, 11,250 to 12,000 with roughly 10,000 of those to go. I think that's a prudent guide in this operating environment.

Sorry, 10,000 to go. I misunderstood. Sorry.

Well, we delivered 1,929 in the first quarter.

Got it. To build 10,000 to go to deliver. Got it. Yes. I think that the reason for that range, it's not sales. We're selling in 2023. And we're very -- I said last quarter that the next home sold by us in December had the highest margin we've seen in this cycle. I can repeat that comment now 3 months later that the next home sold today has the highest margin we've seen in this quarter because we continue to raise prices more than costs are going up. But that's a '23 comment. As to '22, it's supply chain. We missed deliveries in the first quarter. We've given you guidance in the second quarter on deliveries. Obviously, we have a lot to do in the second half. If we hit our delivery guidance in Q2, 63% of our full year deliveries to hit the midpoint of guidance would occur in the second half. Our 10-year average for second half deliveries is right at 60%, and we've studied the construction status of the backlog. And it is further along than it has been historically. So we are comfortable that we can get to that 63% for those reasons. But we think it's prudent right now to keep that 750-unit window because of the environment we're building in. There are some quick move-in spec homes that will still need to be sold. But with the market conditions, I think that's a very, very low risk of impacting the ultimate delivery number. I think the conservatism right now is simply based upon the production environment we're living in.

That's helpful color. Another broad one for me. You addressed a little bit in your prepared remarks, Doug. There is a bare narrative out there that luxury builders are a little bit more price elastic. And the first move down usually happened in that portfolio, resulting in luxury builders, perhaps moving buyers to other categories, as the buyers trade down in this high interest rate environment. How would you address that?

We disagree. I think our buyers are much more financially sound. I went through the numbers on their creditworthiness. I went through the numbers on the average LTV is 70%. Yes, a luxury home is a discretionary buy. We understand that. But when we look at prior cycles, we've been the darling of the industry at times when rates have gone up because the buyers can still afford our homes. It is not a monthly payment decision. Our buyers don't think -- maybe except in Detroit, where they lease a lot of automobiles. They don't think about monthly payment. They think about moving up in their lives. They think about getting that larger home as the kids hit middle school, buying that second home, moving down as boomers into that luxury community and they have the bread. They have the ability, they can afford it. They don't max out the mortgage. Their -- 50% of our buyers are more -- today are move up. And the percentage that have a home to sell is 70% and look at the equity that's been generated in those existing homes for 70% of our client that allows them to move up. So that little thicken rate up 25, 50, 75, even 100 basis points. Historically, we were not 100% immune, but we have been in a better place than the starter home business where it comes straight down to monthly payment and affordability.

All right. That's great color.

The next question comes from Truman Patterson from Wolfe Research.

First, I just wanted to hop back to one of the questions on the early warning signs and as a portion of your orders, your cancellation rate ticked up about a point year-over-year. Just saying if you had any more clarity from the field, is this just simply cancellations in the normal course of business? Or are you beginning to see the higher mortgage rates impact some buyers' ability to qualify for the mortgage?

Truman, I think the cancellation rate is low by our historical standards. I'm looking back at the last 10 years, and 6% looks like our long-term average. It was extra low last year. It's ticked up a little bit this year. A lot of that tick up is a function of how large the backlog is right now. If you look at cancellations as a percentage of backlog rather than as a percentage of current quarter sales, they've hardly moved at all. And we are not seeing an early warning sign, if you will, in cancellations. So I think that's a bit of a red herring, as it relates to having gone from high 3s to high 4s as a percentage of new contracts. It's 1.3% of backlog -- 1.4% of backlog, it was 1.3% of backlog a year ago.

Perfect. And then second...

And in a rising price environment, cancellations are an opportunity for us right now because we get to sell the home at a higher price.

Okay. So cancellations are still beneficial for the gross margin? Okay. And...

Not a strategy.

And it is not a strategy.

Fair enough. And then second question on rate locks. Are you seeing consumers beginning to use rate locks more frequently? Are they using longer rate locks? And if so, how should we think about the cost associated to Toll and where it might impact the income statement?

Yes. We have not yet seen extended period of time rate locks be asked for by our customers. They can lock a mortgage generally in a normal course within 60 to 90 days of closing, and we are seeing them take advantage of that opportunity.

And I want to reiterate, 80% of the homes that we're selling are build to order, right? That's Toll's -- that's our special sauce at our price point. And those homes today will take 9 to 14 months to deliver based on where they're located, how much backlog and production issues. And so the commentary I hear that there is this pull forward of demand because buyers are trying to grab a rate today before it goes up, it's just not the case. Our buyers are not able to lock on our homes until 60, maybe 90 days before that home delivers. And we are seeing tremendous demand and tremendous pricing power. In the last month, as rates have risen and buyers know that they are not running in to lock a lower rate when they buy a home from Toll Brothers.

Yes, it's interesting when you say that if you actually look at the data historically, you're exactly correct that it kind of dispels the pull-forward narrative. So I appreciate it.

The next question comes from John Lovallo from UBS.

The first one is curious how many communities you're implementing that best in final sealed bid in. And along those lines, how do customers tend to react to that process? And do you risk pushing some buyers away that maybe chose to purchase a new home to sort of avoid this process?

So about 90 of our 300, call it, 30 plus or minus communities are currently using the best and final offer program, that may not be for every lot. Sometimes we do it for special home sites where we know we have outsized demand. I know on my last call, I gave some great detail on how that process works and how you can do it in a build-to-order environment because we're not generally bidding a finished spec home, although we'll do that -- we'll also do that. And if you recall, we do it through the lot premium. And then if you are successful in bidding up the lot premium, you can then pick your house and go through the process of customizing the home to your lifestyle. Buyers -- it's how you manage the process and sales has been really well trained in how they manage the process. If there are 30 people that want a home site those that are 25, 26, 27 on the list are pretty happy. We're running this process because at least they have an opportunity. Not everybody is happy, just like not everybody is happy on a resale when it goes to final invest. But that is the environment that we are in at the moment. Buyers are used to it to the resale market. We now have a really cool app, where you can bid through a Toll app that makes it totally transparent. And so I think we've done a really good job of explaining it. It's a bit of a new normal in the industry. But yes, is everybody happy with it? No. People want to walk in and buy a house off a price sheet. But that's not the environment we're working in at the moment. And I'm proud of how we're handling it, I think most buyers are understanding of it.

Yes. That makes a lot of sense. And then maybe going back to Steve's question from before just about where the stock is trading today. I'm curious how this impacts your capital allocation decisions. I mean, if you guys are as confident as you sound in the sustainability of the cycle, which we would agree with, I mean, would your stock be a great investment right now and even more positive signal to the market?

Well, we bought $185 million worth of stock back at $61, guys. So I think that that gives you the answer.

The next question comes from Alex Barron from Housing Research Center. Alex Barrón: And great job. I wanted to focus on the trend in the gross margins this year. Clearly, in the first half, you guys are in the mid-25%. And in the back half, it looks like you'll be in the high 20% range. So I know you're probably not going to give us 2023 guidance, but I'm more curious to see how you guys see margins unfolding, as we move into next year. Is it more likely to stay at the higher level or trend back towards of kind of where margins are currently?

Yes, Alex, I mentioned earlier that the next home sold by Toll Brothers has the highest margin we've seen in the cycle. So I think that bodes very well for 2023. Alex Barrón: Got it. Okay. Great. And then my other question has to do with expectations on orders. You guys obviously only had 1 negative growth quarter in October and then went back to positive this quarter. I guess related to that, in your comment about 50% of your buyers are -- I think you said are move up, I'm curious what percentage of the buyers are you guys seeing that are moving across state lines? And what percentage of your buyers are first-time buyers? I'm trying to get a sense of your mix and -- and what's really driving the strength there?

Sure. And just to clarify, because we are now restricting sales significantly, focusing on production and getting specs started Q2, as I think we made it very clear, will also be a quarter where sales will be down. 40% of our sales are to those moving to a different market to migration. Alex Barrón: Got it. And what percentage of first-time guys?

30% are first time home buyers.

The next question comes from Susan Maklari from Goldman Sachs.

First question is you made the comment, Doug, that the web traffic remains high and that you haven't really seen any changes in that. But just wondering if you could give us any more details in terms of what you are seeing online. Are people looking at different products? Is there any change in options that they're keeping an eye on? Are they spending more less time? And any details around what you're seeing there?

Sure. So we have about $9 million visitors to our website per quarter. And our foot traffic, as I mentioned, is also up even though they all can't buy, because of allocations and -- but they're still coming out. I'm very proud of our website. We have an amazing web team. We better have the best website in the industry being America's luxury homebuilder. I think we do. We track the amount of time they spend on the website, the stickiness, right? You get on a website and how long you want it. That's a big one. We also have online sales consultants now that represent every single community in every market where they engage with clients through web, texting through phone calls, not only before communities opened to set up the grand opening, but even as communities are open and selling, and we call them online concierge service. And they're very, very engaged now with the web visitors. It's very easy to see how you can click the button and start to chat with the online concierge and they set it up. They tee up that client for the sales manager at the local community. The one thing we like to see is when they click on the directions page, because that means that they're thinking about getting in their car and running after the community. But the opportunity to look at videos now to do walk-throughs of homes to do some design of your home, custom design to fiddle with colors and products. All of that is available and I'm not going to bog down on the percentages they spend on each different page, but we track it very closely. We also changed the experience. So different pictures come up, different pages come up and we see what the client seems to like. And when you have 9 million visitors a quarter, you get some pretty good trends that allow us to figure out the most efficient, most optimal web experience. And so our website is very fluid and constantly changing. Does that help?

Yes. But I guess are you seeing any changes in the stickiness to the website or what they're looking at. Anything that's been different in the last couple of weeks, as we've seen rates rise relative to where we were a couple of months ago or a couple of quarters ago? Or has it been consistent?

It's been consistent. Yes, I don't think -- I'm not aware of anything in the last month or 2 that has changed sort of the buyer experience on the website. We track web leads where they start on the web and ultimately go to agreement, which in today's world, I think I'd be shocked if as a buyer that hasn't at least spend a little bit of time on our website. But I don't -- Susan, I don't think anything's changed recently -- because rates have gone up or for any other reason.

Okay. Okay. That's helpful. And then my next question is just around when we think about where the business is today, holistically, you focused a lot on growing the affordable luxury piece in the last several years. When you think about the business going into a rising rate environment with the affordable luxury piece of it today, which you didn't have in the past. How do you think about the mix shift that we could see the potential to sort of grow the luxury versus the affordable luxury pieces of things? And any changes there that could be coming?

Yes. I'm very happy with the progress we've made over the last 3 years in widening the price point, the product offering and of course, the geographies. We're not done. There will be more affordable luxury in the mix. Right now, it's about 40% and I think it could probably get up to maybe 45%, maybe 50% over a bit of a longer term. But we're not giving up on luxury. There's still a lot of opportunity at the higher price points for us and we're seeing that success. But as I look longer term at that mix, we're beginning to approach what I think is optimal, but we're not quite there, but we've come a long way. I'd say we're probably 80% on our way towards the long-term strategic mix that we want. By the way, when I say 40%, that's on the dollar value. So the actual number of homes would be higher since those homes are less expensive.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you, Jason. Thanks, everyone. We really appreciate your interest and support, and happy spring. It's on its way, almost March 1. Take care.

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.