PulteGroup (PHM) Q3 2026 earnings call transcript

Thank you Erica, and good morning. I want to thank you for joining today's call as we look forward to discussing PULTI Group's third quarter operating and financial results. On today's call, I'm joined by Ryan Marshall, President and CEO, Jim Osowski, Executive Vice President and CFO, and David Carrier, Senior Vice President Finance. The copy of our earnings release and this morning's presentation have been posted to our corporate website at PULTI Group. com. We will also post an audio replay of this call later today. I would highlight that today's presentation includes board looking statements about the company's expected future performance. Act results to differ materially from those suggested by our comments today. The most significant risk factors that could affect future results are summarizes part of today's earnings release and within the accompanying presentation slides.

These risk factors and other key information are detailed in our SEC filings, including our annual and quarterly reports. Now let me turn the call over to Ryan.

Thanks Jim and good morning. I'm very proud of the business results our organization has delivered thus far in 2026. In a world where we can't control global events or macroeconomic conditions, we can manage how we respond to the operating environment. To that end, I think PULTI Group continues to do an excellent job navigating today's evolving market dynamics and doing so in a way that is consistent with our long-term operating strategies. We continue this approach in the third quarter as we remain disciplined in our business practices and focused on delivering an outstanding home buying experience within a period that underwent meaningful change. To the former, in the third quarter we delivered almost 7,000 homes, maintained our focus on delivering strong gross margins and overall solid returns while increasing our backlog and returning nearly 400 million dollars back to our shareholders.

As to the latter, consistent with all the reporting and commentary swirling around the current state of the US housing industry, we experienced a notable slowdown in home buying demand as we moved through the third quarter and interest rates surged higher. The reality that buyer demands slow through the quarter won't be news to anyone on this call. What I think is interesting, however, is exactly how buyers responded.

Based on feedback from our sales associates, in the third quarter, they were routinely working through these important customer issues. Buyers are spending more time getting comfortable with the higher monthly payments, interest rates, and financing options before moving forward. The need to sell an existing home remains one of the most significant conversion barriers. Buyers have clear expectations regarding lot characteristics, home functionality, and overall fit.

In other words, they are taking advantage of market conditions to be very particular in what they're willing to pay for. And finally, timing often appears to be a symptom rather than the true obstacle. In many conversations, our sense is that not ready yet is really about financing or existing home sale readiness rather than timing itself.

The most interesting point with these comments, they really haven't changed very much from earlier in the year when interest rates initially started moving higher. Prospective buyers continued to have concerns about stretched affordability, high monthly payments, and home sale contingencies. Our sales teams were able to help buyers solve these challenges such that our conversion rates in the third quarter were comparable to the first and were still able to convert prospects at a similar rate. Why the meaningful deceleration reported sales? What changed in the quarter and most notably in September is that the big move higher in interest rates along with inflation, global tensions, and waning confidence reached the point where more consumers simply put their search on pause.

In the third quarter, our customer conversion rates were relatively stable, but traffic to our communities was down 14% from the prior year and on a sequential basis down 11% from the second quarter. These conditions have continued through the first few weeks of October. As you would expect, most of the missing traffic were first-time buyers as this group remains the most impacted by higher interest rates. Not only did this pronounce slowdown among our first-time buyers impact our third-quarter sign-ups, but it also directly impacted our closing volumes for the quarter as the majority of our spec sales are within our first-time buyer communities.

We have done a great job controlling starts and in turn spec inventory, but the impact of having fewer finished spec sales reduced our home closings in the third quarter. I fully appreciate that this isn't a very upbeat message for earnings call, but it's important to acknowledge that the change in the market conditions over the past 30 to 45 days when discussing faulty groups results for the quarter and the year-to-date. Consistent with previous quarters, in the third quarter, we focused on serving what we consider core home buying demand rather than chasing volume in a market showing little price elasticity. You can see this in Polte groups reported Q3 financial results.

As closings came in slightly below our guide, but a strong reported gross margin of 24.8% helped the company to deliver earnings of $476 million or $2.53 per share. Through the first nine months of 2026, Polte group delivered just shy of 20,000 homes and generated $11 billion of home sale revenues. Operating within this year's more competitive market conditions, we have appropriately managed price and pace to capture sales while driving year-to-date gross margins and operating margins of 24.7% and 14.2%, respectively.

In alignment with our capital allocation priorities, our strong nine-month financial results supported investment of $4 billion in the land acquisition and development and the return of $1.2 billion to shareholders through share repurchases and dividends. I'll provide more detail on how we're navigating current demand dynamics later. But first, let me turn the call over to Jim Osowski for a detailed review of Polte groups' third quarter financial performance.

Thank you, Ryan, and good morning. And what was the challenging quarter for US housing or financial results once again showed the value of our more diversified and balanced operating platform? Let's get started. Our net due orders in the third quarter told 6,208 homes, which is a decrease of 6% from the third quarter of last year. Reflective of Ryan's comments about lower consumer traffic, the decrease in Q3 net new orders was driven by a 13% decrease in absorption pace, partially offset by a 7% increase in average community count of 1,077 for the quarter.

In the third quarter, our cancellation rate as a percentage of starting backlog was 10%, which is down from 12% last year and down 50 basis points from Q2 of this year. Even in today's dynamic demand environment, these relatively stable cancellation rate suggests that customers under contract remain committed to closing on their home. Our absorption pace for the third quarter was 1.9 homes per month, which compares with an absorption pace of 2.2 homes per month last year. Absorption pace was lowest in September as interest rates surged higher throughout the month. Our lower absorption pace is a consequence of the drop in perspective buyer traffic to pulty group communities. By buyer group, net due orders in the third quarter among the first time and move up buyers were down 9% and 14% respectively from last year.

Once again, we benefited from our leadership positions serving active with all consumers as Q3 signups among those buyers were up 11% over last year. The slower sales among move up buyers reflect in part ongoing weakness within this buyer group and our Texas and West operations.

Within our active adult business, we continue to benefit from our prior year lane investments as the increase in net new orders was the result of ongoing community count growth. Over the past five years, we have grown our active adult community count by almost 20% and we look to increase market share even further with the ongoing roll off of our new explore by Delweb brand. Halty groups third quarter home sale revenues total $3.9 billion, which is down 9% from last year's third quarter revenues of $4.2 billion. Lower revenues for the quarter were primarily the result of a 9% decrease in closing values, the 6876 homes.

Q3 closing bonds were negatively impacted by rising interest rates and reduced consumer confidence as we sold a fewer number of spec homes that we were expecting to sell and close within the period. By buyer group, third quarter closing breaks down as follows. First time and move up were both 38% while active adult accounted for 24% of closing in the period.

Closings in the third quarter of 2025 were comprised of 39% first time, 39% move up, and 22% active adult. On a year-over-year basis, third quarter backlog was higher in both units and value. We ended this year's third quarter with a backlog of 10,298 homes valued at $6.4 billion compared with prior backlog of 9,888 homes with a value of $6.2 billion.

At the end of the third quarter, we had 14,599 homes in production, of which 6,627 or 45% were spec homes. Our divisions have done an excellent job managing production, as total specs are down 10% from the same period last year, while finished specs are down 16% from last year. The 1,696 earned average of 1.6 finished spec homes per community.

While our current spec inventory level is right-sized, we continue to tightly control our star's pace to line production with changing demand dynamics. In the third quarter, we started just over 6,500 homes during a period in which we sold 6,200 houses. Based on backlog, homes under construction, and recent trends in the pace of spec sales, we now expect to close between 7,000 and 7,500 homes in the fourth quarter. We still have to sell and close a number of spec homes to achieve the guide, so we will be closely assessing buyer demand and taking the appropriate steps needed to convert spec inventory into closings. Further, given the expected Q4 closings, we now anticipate four-year closings to be in the range of 27,000 to 27,500 homes.

Based on the mix of homes, we anticipate closing in the fourth quarter. We are still guiding our average sales price and closings to be in the range of $550,000 to $560,000 in the fourth quarter and for the full year. Based on prior year land investments, we came into 2026 expecting Euro to year community count growth of 3% to 5% for each quarter, but our average Q3 community count of 1,077 was up 7% over last year. The higher growth rate realized in Q3 reflects the slower closeout of existing communities in the period. We are still forecasting Euro to year community count growth of 3%, 5% in the fourth quarter, the fewer community closeouts in the period.

Could again elevate the percentage growth rate. Consistent with our previous guidance, our reported third quarter gross margin was 24.8%, which is down 140 basis points from last year and down 20 basis points sequentially from Q2 of this year. Our reported third quarter gross margin is inclusive of incentives of 10.4%, as well as $26 million for 70 basis points of land impairment charges recorded in the period. In the comparable prior year period, incentives were 8.9% and we recorded $17 million of land impairments. On a positive note, our national and divisional procurement teams continued to do an excellent job working with our trades and product suppliers to manage construction costs. Alti's third quarter bill costs were $75 per square foot, which is down 5% from last year and flat with a second quarter of 2026.

Taking into consideration our backlog, current demand conditions, competitive market dynamics, and the need to cycle through existing spec inventory, we expect fourth quarter gross margins to be in the range of 24.0% to 24.5%.

Given our Q4 margin guide, we are maintaining our guidance for four year gross margin to be in the range of 24.5% to 25.0%. SGA expense for the third quarter was $397 million for 10.3% of home sale revenues. In Q3 of last year, SGA expense was $401 million or 9.4% of home sale revenues.

With higher interest rates pressuring consumer demand and the potential that rates remain elevated for longer, we remain focused on controlling overhead expenses while still delivering superior build quality and an outstanding home buying experience. Still, given our updated forecast for fewer closings this year, we now expect four year 2026 SGA expense to be in the range of 10.3% to 10.5% home sale revenues. Our financial services operations reported third quarter pre-tax income of $46 million, which is up slightly from last year's pre-tax income of $44 million.

Mortgage capture rate in this year's third quarter was 85% compared with 84% last year. Multi-groups reported pre-tax income for the third quarter was $625 million and our tax expense for the period was $149 million or an effective tax rate of 23.9%. Our effective tax rate benefited from energy tax credits recorded in Q3. For the fourth quarter, we expect our tax rate to be approximately 24.5% assuming no discrete period specific tax events. Q3 reported income was $476 million or $2.53 per share. In the third quarter of 2025, we reported an income of $586 million or $2.96 per share. The Foltis Q3 earnings per share was calculated based on $188 million to looted shares, which was down 5% from the prior year as we continue to allocate capital to systematically repurchase outstanding shares.

In Q3 of this year, we repurchase 2.8 million common shares for $350 million or an average price of $124.70 per share. Over the first nine months of 2026, we repurchased 8.4 million common shares for $1 billion per an average price of $123.51 per share.

While market conditions can make underwriting land transactions more difficult, we were successful in investing $1.3 billion in land acquisition and development in the third quarter, of which 51% was for the development of our existing land assets.

Year to date, we have invested $4 billion in land acquisition and development. We now expect to invest approximately $5.3 billion in land for all of 2026. Inclusive of land transactions completed in the period, we ended Q3 with approximately 224,000 lots under control. Total lots under control are down 16,000 from the third quarter of last year and down 4,000 lots sequentially from Q2 of this year. We continue to underwrite new land deals, but we are also walking away from select option transactions that may no longer meet risk-adjusted return thresholds. In the third quarter, we elected to walk away from approximately 8,000 lots previously held under option.

As we have discussed and prior calls, we view lot options as a tool to both improve project returns and to help mitigate market risk. One without the other really provides pull-to-group with limited, if any value. Reflecting on our differentiated approach to the lot options, the end of Q3 over 85% of pull-to-groups land options were with underlying land sellers.

The rest of our options are structured as one-off transactions, but they select number of land bankers. At the end of the quarter, we had 55% of our lots held under option. And lastly, when it comes to optioning dirt, we continue to solve for the best business outcome on a deal-by-deal basis, rather than simply targeting an option-lot percentage.

Given our operating results for the first nine months of 2026, we still expect to operate in cash flow generation for the full year to be approximately $1 billion. And finally, we ended Q3 with $1.4 Adjusting for the cash balance, our net set to capital ratio of quarter end was 3%.

Now, let me turn the call back to Ryan for some final comments.

Thanks, Jim. This latest increase in interest rates has forced more consumers to the sidelines and work to make overall operating conditions more challenging. While higher rates may demand conditions in the third quarter, generally more competitive throughout the country, our geographic diversity again proved incredibly valuable. In the third quarter, we continue to see outperformance in our Florida operations and key markets in the Midwest.

Better performance in these markets help the offset softer demand in other areas of the country, including markets in the southeast and ongoing weakness out west. Looking beyond the quarterly earnings, I believe in the fundamental strength of long-term housing demand. And across all the financial and emotional underpinnings are too compelling to ignore. I also believe that after months of mortgage rates above 7%, consumers could view even a modest pullback in interest rates is reason enough to reengage in the home buying process. Although I acknowledge that it may take more than just to move lower in interest rates, as consumer confidence is weighed down by rising fuel costs and fears about ongoing inflation and conflict in the Middle East.

While a quick re-acceleration in home buying activity is certainly possible, the reality is that higher interest rates pressured industry-wide new home sales in September, and the potential for interest rates to stay higher for longer is clearly present. As such, I think it's helpful to discuss how we're assessing market opportunities and challenges.

First, our diversified operating platform offers tremendous advantages as we can capitalize on the stronger markets and consumer groups to help offset any weakness in other parts of the business.

Second, consistent with our demonstrated operating practices, we remain focused on serving core demand rather than shedding margins in pursuit of less profitable low-returning volumes. Obviously, we must turn assets, but sometimes lowering price doesn't generate incremental sales. Rather, it just makes all your home sales less profitable.

Third, we have a robust and well-structured land pipeline. We are on track to invest $5.3 billion in land acquisition and development this year. If conditions warrant, we are fully prepared to reduce land spend in 2027. Further, given the very intentional way we have structured our controlled lot positions, we can and will walk away from option lots that no longer meet return hurdles. And finally, Foulty Group's balance sheet provides tremendous strength and financial flexibility with $1.4 billion in cash and net debt to capital of only 3%. Not only can we weather tough times, but we can capitalize on market opportunities that they develop.

Last week, we had our quarterly operations reviews with my senior team along with our four area presidents and the president of Foulty Financial Services. Beyond just reviewing Q3 results, the field leaders had already developed action plans and where appropriate are already taking steps to respond to the changing market dynamics. I can't overestimate the value of having an experienced leadership team that can quickly assess and adjust. I want to thank them and the entire Foulty Group organization for the operating and financial success they delivered in the third quarter. And for their efforts to ensure our company success going forward.

Now, let me turn the call over to Jim Zoumer.

Okay. Thanks, Ryan. We're now fair to open the call for questions so we can get to as many questions as possible during the remaining time of this call. We ask that you limit yourself to one question and one follow up. Are our players start Q&A?

Yeah, Alan, good morning. Thanks for the question. Definitely all buyer groups felt it, but the first time it was outsized impact there, so I don't think any buyer group is totally immune, but the move up in the active adult is certainly fair better, especially given a lot of those buyers in our world pay cash. They're less rate sensitive than the first time buyers, which largely 100% need a 30-year mortgage, or some kind of mortgage.

John, I think there's a few anecdotal kind of markets where maybe you saw some movement in price, but the environment that we've been living in and we continue to live in is that pricing between new and resale is almost on top of one another. And in fact, in some cases, resale is more expensive than new, which is a phenomenon that I don't think we've seen often in the, you know, the 25 years that I've been in this business. So, I don't know that I would necessarily 100% agree that we've seen a big unlock in resale pricing going lower. I do agree with you that the resale market freeing up does restart the flywheel. And that's been a consistent comment that we've been making for the better part of the year and a half.

The thing I would comment on, and Jim, I touched on it sort of Jim, one of the biggest impediments that we're seeing right now is that our move up and active adult buyers need to sell their existing home. And that is tough. And part of the reason it's tough is because the perspective buyer that's going to buy their home is faced with a 7.5% interest rate. And they don't have the ability to tap into the bought down mortgage rate like we can offer. So, there's definitely some headwinds out there as it relates to resale market and the new home market that is largely centered around 7.5% interest rates. We can certainly address some of that.

We are with our bought down rate, but it's hard to reach over the fence and help address the challenge on the resale side.

Yeah, we're really pleased with where we're at. This is the third quarter in a row that we've seen our sticks and bricks are down 5% on a year over year basis. So, as we look at it, teams are doing a great job and would continue to expect that we can bring costs down year over year on low single digits again in the fourth quarter.

Hey Stephen, great question. SG&A is something we look at all the time. Really as we look at kind of the third quarter you're right. As absorption slows and volume has come down, we've really run into a couple things. One, some of our communities are hanging around longer than we thought. So, some of those that are taking longer to close out, we've got costs on that.

You nailed it at lower absorption paces, whether you're selling three homes a month in a community or two homes a month in a community, you still have to staff at the exact same way. So, when we factored in the guide, we looked at kind of where it's at, we looked at our volume that we lowered for the course of the year and we really don't have anything noteworthy that we need to change course on. It's just more of a realization of it as communities are hanging around longer and absorption paces have come down. We've lost some leverage in the business.

Yeah, I would tell you, Steven, we really don't see across our different consumer groups a different mix of SG&A. You're right, if you're at a higher ASP level, you probably get better leverage out of it. But again, when you look at the absorptions, we quoted they were off 13% for the quarter. Again, we're still staffing the same level in our communities from a construction to sales standpoint, but as you lose that leverage, that's really the headwind that we're fighting against this year.

Steven, the only other thing with our Dell Web communities, they tend to be bigger. They have bigger sales centers, they have more models, but you do a lot more volume out of those communities as well. So to Jim's point, the way we run our businesses and the way the management teams are set up, there's really no difference between a Dell Web community and a first-time syntax community in terms of the overhead dollars that are spent in order to run a community.

Yeah. Hey, Matt, I just, you know, maybe clarify one thing. There's not, we don't have a spec problem. Our spec inventory is kind of right where we wanted it to be. And so we actually had less spec closing that came through in the third quarter than we would have expected. And so we did get a benefit above the guide.

Our Q4 margins, you know, we've, I think adjusted for the reality that we're in, and we've mixed in stuff that's in backlogs, stuff that was dirt sales, stuff that's sold the spec in process, and then things that we would expect to sell and close during the quarter as a spec home, which typically come with lower gross margins and higher discounts.

Dear question about what does that mean for next year? You know, I think it's going to kind of come down to, do you have a change in mix between dirt to be built and spec? We've been, you know, fairly vocal and open to say we're moving kind of transitioning the business back to more dirt sales.

And it's, you know, we've said we'd hope to get it accomplished by the end of 2027. We were on track to do that. You know, markets got a little bit tougher, but we'd still expect to be back to a kind of optimal mix of 60% dirt sale, 40% spec. You know, if all things being equal, that would have a favorable outcome in terms of margin, just because our highest margins come on homes that we sell as dirt, if that all kind of holds together, Matt.

Yeah, Matt, it's entirely a function of how quickly the market turned and specifically in September. So, you know, as you, I'm sure you can appreciate, we submit for permits in August for homes that are going to start in September. So kind of the balls in motion and rolling on those things. And because there is such a leg down on sign up and sign up activity in September, you know, we're a few hundred units out of balance from kind of perfectly matched starts to sales.

So, it's going to be more comparable to what we experienced in the third quarter Mike, which was dramatically lower than kind of what we experienced. Q4 of last year, Q1, Q2 of this year, there was a meaningful change when rates went to seven and a half percent. And you know, as much as anything, I think a meaningful change in how the consumer is feeling. And you know, there's so many things out there that we just have zero control over gasoline at six plus bucks a gallon, the war, consumer confidence, et cetera. So, we've we've factored in our most recent spec conversion experience into our Q4 guide.

So, just any early thoughts on how Mike, we're probably not going to break with trend on the on the month by month, kind of commentary other than just to say that there was a noticeable change in September. And it's it's continued into October. We are in the middle of kind of planning time right now. And it's you know, the current environment has made it a more difficult planning time was it was part of the reason that in my prepared remarks toward the end, I tried to kind of highlight kind of how we're seeing opportunities and challenges. And and where we think there are some potential opportunities than there are some, and then there's you know, there's plenty of challenges out there as well.

You know, the biggest thing that we're spending the most time talking about is how we're going to think about capital allocation. You know, we have a great business. We're in the right geographies. We love the consumers that we're serving. There are so many and we have an amazing balance sheet. There are so many good things about our business, our strategy, how we're operating. Those are the things that we can control when we're saying grace over and and where we can really kind of position ourselves for continued success is to be thoughtful and smart about land spend and capital allocation. You know, I think we've been super clear, we're running this business for the long term, not for kind of this quarter or even next quarter.

So, you know, that's that's how we're spending most of the time thinking about our planning process is really all around capital allocation.

Sure. I would tell you during the quarter, the 10.4%, which was flat sequentially with Q2. We really didn't see any kind of a change in the anti-namic amongst the consumer groups or even within the mixture of it. You know, it's split between financing incentives as well as discounts on, for example, speculative homes that we have. On the build-to-order, we're really happy with how we've been able to use the financing incentives on that today. About 40% of, you know, the financing incentives and forward commitments we do are for build-to-order homes. So as Ryan's touched on before, those are higher margin homes. And so we like the opportunity to use those as we start to kind of build our Q4 and, you know, now students still even going into the 2027.

Yeah, Sam, I would tell you there's not much in our SG&A that's different as a result of broker rate or attachment. The attachment rate has been running higher for probably the better part of 18 months because of lack of resale activity. So the brokers that are out there with buyers, you know, the good news is more of them are coming into our sales centers, which means our attachment rate ticks up slightly, but that's about it. You know, we do in certain cases offer broker incentives, but we really try to manage that. I'd rather see if, you know, there's incentives that need to be given. We'd rather see those go to the buyer.

Hey, Mike, we highlight Texas. Those really all four markets, I think, have seen an uptick in available inventory. And it's, you know, all those, the entire state has been more difficult for some time. We, you know, we have seen flashes of brilliance in Dallas, in Houston, but, you know, Texas continues to be a tougher operating environment. Florida, where we're positioned, the consumers that we're serving, we're not, we're not seeing inventory pressure in Florida.

Mike, we do have a phenomenal balance sheet. And, you know, it's, it's one of the things that I think is arguably our will probably prove to be one of our biggest advantages in a more difficult operating environment in terms of our approach to kind of M&A, et cetera. Part of the reason we have such a great balance sheet is because we've avoided chasing kind of unnecessary or inappropriate opportunities. And we'll, we'll stick to that kind of game plan. We do look at a lot of things.

And we're just, we're very choosy and as, and I won't spend a ton of time going through it today, we look at M&A opportunities is really more allocation of capital in the land. And so we think hard about the consumer groups that an M&A opportunity will bring to us. We think hard about the markets that it will give us access to. And if, if we go through the evaluation process, we don't think that it helps us in terms of our long term strategy. We're not interested in acquiring a competitor just for the sake of saying we got bigger because that's, that's not where we think the values created. So we certainly got the financial strength and financial capability to execute, but we're going to be super disciplined that if we are pursuing an opportunity, it truly furthers, you know, further and gives us gains against our strategic priorities.

Hey, Anthony, thanks for the question. And our procurement team assisted a phenomenal job. We've maintained kind of our price per foot in the current environment.

And I think we've done just a wonderful job with that. There is pressure out there on a couple of fronts and end to your cycle time question. We went below 100 days for the first time since pre COVID. And that includes all of the big four and five story multifamily buildings that we do are incorporated in that 99 days. So I think, I think our construction teams have done an amazing job managing production. Our procurement teams have done a great job with cost. The headwinds that are out there, the current immigration enforcement, which I think is been widely reported on, that's happened to disruption in the broad labor market. And so, you know, we're certainly navigating some cycle time pressures as a result of kind of what's happening more broadly with the labor pool.

And then in terms of, you know, are there cost opportunities? We're always looking for them. But in an inflationary environment, which we seem to clearly be back in, you know, I think it'll, it'll get harder and harder, especially with kind of fuel where it is. And, you know, nothing gets to our job sites without coming on a truck. You know, those, those cough pressures, I think are real.

Yeah, the West, the West has been taught for a long time. We're probably on two, two and a half years of challenges in the West. And, you know, they're, they're really good communities. They're nice places to live. They're thriving economies. I don't think there's anything that's broken. The biggest thing that I'd call out is just affordability. It's, it's really expensive in a lot of the Western markets that we operate in, particularly the coastal markets. So, you know, they'll, they're good places where jobs are being created and people want to live there.

We're pretty confident that, you know, this, this two will turn and they'll come back into being kind of favorable places to do business, but we're in, you know, we're in a little bit of a barrel right now in the West.

Yeah, really. The only thing they'd say in the fourth quarter and we had called it out earlier in the year was, you know, lumber started to move up earlier in the year, which we said would be a little bit of a headwind in the fourth quarter. You know, lumber started to stabilize though, but really that's, that's it. Otherwise, I tell you the teams continue to do a good job and I would tell you a cute boar should look pretty similar to where Q3 is.

Yeah, Ray, I think it really depends on where the land is located from a city MSA standpoint, but also the specific city block that that land is located in. So there's some land that it continues to accelerate in price. It's super competitive. And, you know, there's there's no decreases there. Some of your B and C locations were certainly seen kind of pricing their change. You know, we're we all just as a matter of practice, good market, bad market. We always re underwrite land kind of multiple times as we go through kind of the entitlement process before we ultimately buy it. So, you know, probably the biggest benefit that we've seen is the acceleration of land prices.

The rate of acceleration has slowed significantly, but I don't know that we're quite into a place where I can tell you that land has gone on 30% end of season clearance. We're probably not quite there yet.

Sue, they are. You know, it's a buyer that's you know, assuming they're making the decision to move forward. They're they're better prepared. They've got equity from a prior sale. Their personal balance sheets are stronger. And we're seeing little change in terms of how they're behaving relative to kind of prior quarters.

Yeah, I mean, for references in the quarter options and a lot of premiums were 117,000 per lot. That's up from last year and from the prior quarter. A little bit of that is mixed because we had less specular sales. But to Ryan's point, if people are committed to coming in and closing on the home, they're taking the opportunity to pick the things that they want.

No, I think our mix of cash buyers by brand is pretty consistent with what we've historically seen. So as a percentage, because we had less first time, you know, maybe it ticked up a little bit overall. But, you know, the way we do and I think you should look at it is by by by your type and it's unchanged.

Appreciate everybody's time this morning. We're certainly available to have questions over the course of the day. Otherwise, we will look forward to talking to you in a quarter. Thanks concludes today's call. Thank you for attending. You may now disconnect.