“We are anticipating a modestly better trend this year as we are encouraged by the recent 75 basis point decline in mortgage rates.”

In context

“from Atlanta up the Eastern Seaboard to Boston. In terms of cadence for the quarter, demand followed the typical seasonal pattern with September being the strongest for deposits. October was stronger than expected given the rise in mortgage rates, and we were encouraged that we did not have to increase incentives to drive sales in that month. As I mentioned, we actually raised our average price by $16,000 in the quarter, broken down as a $12,000 increase in base price and a $4,000 decrease in incentives. Demand has remained solid into the start of our first quarter and is consistent with normal seasonality. As a reminder, historically net orders declined about 20% from our fourth to first quarter primarily because of the holiday months of November and December following our first quarter. We are anticipating a modestly better trend this year as we are encouraged by the recent 75 basis point decline in mortgage rates. With inflation easing over the past few quarters, we believe rates may drop further and the timing of the rate decline is setting up nicely for the upcoming spring selling season. This timing also plays well into our strategy of increasing our spec supply and growing our community count. In the fourth quarter, spec homes represented approximately 42% of our orders and 33% of our deliveries. We expect that spec sold in fiscal 2024 will account for approximately 35% of deliveries in 2024. Remember, that we define a spec as any home without a buyer that has a foundation poured. We sell our specs at various stages of construction, which allows many of our buyer the opportunity to still personalize their homes with finishes that match their case. Specs allow us to buy down mortgage rates and w”