MHO - Earnings call transcript Q4 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the M/I Homes Fourth Quarter and Year-End Earnings Conference Call.

[Operator Instructions]

This call is being recorded on Wednesday, January 29, 2025. I would now like to turn the conference over to Phil Creek. Please go ahead.

Phillip Creek

us. joining for you Thank

Joining me CEO our Bob our today company. the President; and call and of is Derek Schottenstein, on Klutch, mortgage President

First, significant material during encourage call because disclosure, questions for prohibited issues with this to from you are ask discussing regarding consider to items any we you that we address regulation nonpublic you our directly.

any forward-looking release to everyone call. advised that forward-looking language to call. to call about I'll this remind also this statements, press the With update during today's to statements turn made the want forward-looking to in Also And that over as undertakes contained during the any comments applies no that, made cautionary be statements company obligation Bob.

Robert Schottenstein

you an We thank by us Thanks, income XXXX, revenue, highlighted morning, for outstanding homes in very Phil. had delivered, record and record record and today. year returns. joining strong Good

given challenges latter economic the are our changing conditions particularly the throughout the particularly demand performance, and part faced, of proud year. We of we

As the even fully our and such buydowns quarter, fourth a mortgage moments. of in that part few mortgage the became more business become during fourth bit implemented and an time, all for and we during quarters. the rate impact rising everyone buydowns more a strategy. rate discuss I need more of the rates important will of generate this sales. Demand At traffic choppy incent has knows, to third began

the review will our performance. I First, of XXXX highlights

were basis than Gross margins a a increase XXXX. For XX% the a in record year the to generating X,XXX $X.X record year, billion XX.X% XXXX. XX% points full homes, revenue, increased XXX homes over better and for delivered

than ago, record improved for a XXXX the and compared on resulting of return better $XXX XX%. full pretax in pretax thus XX.X% equity million, XX.X% to XX% of margin a Our year to income year

homes, sold XXXX. X% full better the X,XXX year, than we For

drop-off of quarter. with is factors, demand the expensive. our during more challenging quarter. Phil became buydowns our As markets attributable during more became some of choppier rates cost will sales seasonal detail, Though fourth number of decelerated and the the fourth review in the rate a more to rising, in And

gross The reflected down quarter. buyers year impact the basis down third points are approximately XX.X%, fourth our basis XX ago quarter of cost points a of from from using and in of margin our Nearly is sequentially this now rate buy-down. XXX XX% the

season, It's traffic we're we payments using we challenge. credit As that of XXXX be start important nearly demand sales. the with that and a in continue XXX quality buyers very begin of strong of seeing average XXX selling approaching XX%. We down ended average and note somewhat incent will XXXX or to approach continues drive to buydowns communities. Accordingly, $XX,XXX to of the the remains rate scores with

increased community over average X% count Our XXXX. by

are We estimating XXXX. average currently growth X% a community for count

Now additional comments markets. will some provide I on our

Chicago in Our income division were Orlando, contributions by Dallas, Raleigh. Tampa, and Columbus, led XXXX

our of markets, of Our northern markets. remaining X% and of the region Southern fourth for new which quarter in our in consists XX X contracts our region, X% XX increased the which of consists the XX

For the region. Northern X% in contracts region and in XX% our year, new Southern increased our

quarter XX% deliveries. XX% over and quarter the of year's increase year's over region XX% in Southern deliveries. representing increased deliveries last Northern Our an fourth region, total contributed last of fourth

region in increased region. and the northern in homes increased the delivered the For Southern XX% year, X%

the by XX% region Our ago in and in owned and Northern a Southern the to XX% controlled by lot XXXX. increased compared region to compared position year increased

the our Southern this a we owned region balance located owned XX% contracts XX% We the is top the control with of total, X-year supply. in have position we are excellent lots. the which XX,XXX an of XX,XXX land and via in approximately lots Company-wide, Northern or under lots, additional lots, Of own option region. just On

year from we XX% total, this control lots, ago, single-family about supply. and in XX,XXX up over So own equates and X.X-year to a a

Importantly, which us or react in respect which to sheet, all-time to individual flexibility contracts, of about market of conditions. gives our billion our to a book we the changes lots year option significant our controlled to XX% share $X.X pursuant per With record ended equates with to $XXX. an balance demand of equity, value

$XXX also million our in and a debt-to-capital X%. XX% of the down ratio $XXX and This revolving resulted net facility and ended under with X million borrowings a ratio of year XX% year debt-to-capital We of unsecured credit negative ago cash. from a over

condition let demand in addressing and through throughout that conclude, just We interest did history. company's I we As in we're plan state as latter buydowns homebuyer half rate XXXX. affordability financial me our continue the of best the to

well that annual the likely We some compression homebuilding margins from the we undersupply gross in a to as consumer will margins gross demographics feel challenging homes, formations. growing will XXXX. our believe term XXXX. about benefit we and and to long industry continued when begin business conditions, experience continue in in our over somewhat XXXX choppy market the are compared positioned good and of We household positive very Despite

provide Phil will our Now financial on specifics results. more

Phillip Creek

Bob. Thanks,

improvement in XX% December and last to Our October, new the XX% contracts or compared XX% down in up were in in November quarter year. up X%

our fourth was the to Our last rate quarter cancellation X.X% fourth in XX%. year and X.X% the sales was for pace quarter compared

to sales to As a fourth first-time quarter ago. buyer compared the our profile, XX% year buyers our were of XX%

our of compared to were In XX% homes addition, XX% inventory fourth year's quarter sales last in fourth quarter.

compared the end Our of at XXXX. year community XXX to XXX was end of the count at the

opened quarter, while closing communities XX. new During we XX the

had XXXX quarter a XX% communities. XXXX. XX will the a than year-end, estimate homes ago. the of compared in community in new count backlog fourth the X% And X,XXX about in We the billion. higher year, XX% we that And be At opened delivered homes the delivering ago. our were homes our fourth currently quarter that X,XXX to of year increased field came deliveries in For We the revenue we XX% about our XX% average fourth X,XXX quarter in year delivered to $X.X field versus and quarter. inventory from sold homes

average the for $XXX,XXX, quarter fourth $X.XX. X% to compared Our year's last was when price a increase closing

margin our down interest gross basis for XX.X% down quarter. buydown basis incentives. This decrease and rate third mortgage from the points quarter, primarily XXX to year-over-year XX was points Our is due

Our SG&A results community XX% fourth the due higher to quarter record to expenses to our incentive compensation, increased count. also by due due in higher and primarily

of quarter percent XX a for quarter. expenses revenue, XX.X% last fourth points year's to SG&A declined As to basis when compared our the

year. income percentage was quarter the year, versus full pretax And income percent pretax XX.X%, XX.X% was our the for Our the for year. XX.X% as last same last

Our return XX%. was equity on

During full the of EBITDA. fourth $XXX And generated of quarter, EBITDA. for we the we million generated $XXX million year,

in was the was XX%, and we to rate XXXX's quarter, quarter, fourth tax in effective year's be rate effective XX% tax around fourth effective compared last and XX%. our expect Our for XXXX XX% to rate annual

diluted fourth per $X.XX the and per earnings to share share from last quarter quarter $XX.XX increased per from per in year. XX% per Our increased the share for for year's XX% share $X.XX last to share year $XX.XX

our We the years, repurchased our spent XX% $XX $XXX fourth available X year, last of repurchase have our quarter, under authorization. have $XXX and for shares. shares currently in repurchasing And we we the outstanding spent million. million the million During

mortgage Now Derek results. Klutch will address our company

Derek Klutch

revenues $XX our from increased loans pretax amount primarily more income higher up XX% $XX.X with year. and closed. of last million, up This was average result achieved quarter, title fourth the In mortgage the margins, and million a $X.X XXXX, Phil. of million, of over Thanks, pricing loan operations

was $XX.X XX% million same income first pretax year, $XXX.X quarter. Loan-to-value with was XXXX's XXXX, the in million. the our on For the revenue for as quarter fourth of mortgages

We borrower our increase year. were loans conventional or in XXX last of financing as of VA and down continue fourth to and same quarter period. with credit in respectively, increase an an score the in to of XX% government originated solid, for Financial mortgages XX% see were an with average of Even the to by compared XX% almost payment the M/I XX% the XXXX's XX%, borrower compared profile remains closed use FHA XXX government average and on financing,

Our $X,XXX in XX%. the of compared Loans loans increased $XXX,XXX XXXX. the by XX% increased quarter sold to to increased XX,XXXth $XXX,XXX and average originated in volume and to $X,XXX mortgage amount quarter in from

captured the XXXX's an quarter fourth from quarter. XX% mortgage increase of operation fourth in in XX% our business Our

turn the I'll Now back call over to Phil.

Phillip Creek

Derek. Thanks,

quarter credit As we fourth ended far and with balance as cash of facility. no the revolving $XXX million a unsecured balance the sheet, under our borrowings

debt This land year million spent and development during XXXX, $XXX and and XXXX. credit Our billion. last was the interest XX% year. inventory million prior late on below spend from at $X.X matures billion, million Total for land of facility $XXX and purchases matures $XXX on XXXX up rates a up total land we in homebuilding year-end our XXXX $X.X X% was from in public with

XX, million of 'XX, had we year. XXXX, $XXX purchasing December last raw X,XXX land finished We unsold lots, lots. $XXX of raw own X,XXX of lots X,XXX and we unsold and which at In finished under lots. purchased were XX% compared million to development And land

year, We year-end, the lots of lots. XX,XXX have owned. a strong the We about and X-year At XX,XXX are the a XX% own land controlled at end position controlling lots supply we region. Northern the completed are total inventory the total about region X,XXX the X,XXX X,XXX had And community, are and Southern and XXX homes. homes, in inventory of per inventory, X of in

our homes inventory presentation. total inventory now had open for we questions the This end, year and any We'll Thank Last or homes. completes completed call XXXX you. comments. XXX

Operator

[Operator Instructions]

and comes Our Ratner of the Zelman from Associate. Alan line from first question

Alan Ratner

what love certainly specifically to quarter, Well, I and is Florida. appreciate consistent with Texas question, from heard drill the first commentary choppiness the My I others. in in I'd the on and think, we've

a focus so that business. it's think about, little your there approaching areas market about supply/demand investors, of talk board? levels those think, just are concern kind to the the how mean, just inventory I the what a seems you're you're are you backdrop. and XX% bit probably under and or given among trends in seeing incentives, some softening be I Can most across of that I

Robert Schottenstein

than in Orlando, feel new say little good Fort Sarasota, bit question. both. I a in we relatively Staples. about and we're better of course, particular, to Tampa, appears will We challenged Texas Great We Yes. be Florida. feel than do more about that Myers

than So draw the But the challenging markets. last in demand clearly, I conclusions. significant to more any not don't been Tampa has for enough situation levels probably Florida months other X real our business are the there

continues very but of to Our manage. nothing operation can't is slight a be we strong comfortably strong, that and maybe very as Dallas well. softening demand, Houston

in Austin over it was was Austin market, better. of the more about think of came sort it's couple macro years. most We're steady, but San the talking runaway it is most on the in off, getting a I'm but for fire, that most challenged year market Florida, say, highs. I expecting not And clearly is year is the of last I'd same Texas, good After Antonio, us. we're closely. watching And the a steady. we're Tampa good and one the expecting

rate right be It serious. up, Clearly, subdivisions There to business. levels than the but anything doing it's And concern. putting buy the it's manageable. have using downs great strategy. last as cause think a We're you we But throughout don't don't gas our are the situation think a a we where doing inventory of say, very is, part than think more not general, not months. few in it's on I may we markets of in have. we're a a we've whole X we others. I been that big more confident it's We're little are the now number lot

Alan Ratner

I additional And could the questions, and squeeze It's if them around the Two commentary. helpful. Great. I horn the in. there appreciate

First those guys, got if have along count, of a with like more XX% spec of Spec your towards numbers are you up in others, model XX% up XX%. years. correctly, about year-over-year, looks completed it I or recent pivoted all, specs

kind business? that you trajectory Just choppiness all? adjusted pace spec start you're of at your you on demand, feel the Or sense do given like given altering in the are still strategy? the current you makes Have

Robert Schottenstein

makes it think sense. We

this count the Our had communities, year pace across that goal to going our we're to grow we've and year. maintain community is this

passing our over couple where spec strategy. with increased level, quarter probably have be. our It's think to few I about with slightly the needs a now, it We increased minor And right of spec years, each variations. last

Raleigh, virtually As an example, XXX% in we are spec.

it's high. consistent And important it's where the think business. the we're XX across I otherwise, markets. only part that But our market other pretty of a very that's

right business As close remain. will of Phil it it's outlined, to likely our X/X now. and

too. a So catering it And comments, our Series, we I line, product a a big it us The move down needs primarily may which may of our in affordable business, be part is about at our first-time builds this for little, are move most but think little, Xb my up where didn't this it to point. to Smart but that's buyers. mention

our most is Some of to add to XX% that look at homes, remained you portion detached. is meaningful something? to town settled XX% at product. business level. our XX% built. Phil, about single-family that other there the is is the move in That's But A of to about are of and want to about way XX% up did of be business. It that

Phillip Creek

Yes. One you know thing Alan, this. I know

far the those window to is easier of XX-, that. cost a XX-, get As type lot longer effectiveness within XX-day than as than do of rate buydowns things to mortgage it to try

than to can that more putting more way again, type deep or offer XX So close days. that got there But a few you discount financing. specs you XX again, out

Robert Schottenstein

think business had were I'm rate saying that one's me buyers. be that no other our designed one the if another offering other with don't to of conversation homes the builder roughly to of XX of out hand, mortgage close I anything the using have locks could school. long-term But that within than it's we been traffic days. rate built. a And But on we assist have recently And on generate been hand, to asked on buydowns all I sale the

the to So homes have field in delivered. ready to need be you specs

Phillip Creek

little last XX stores And on we is we are plan we -- We bit new more different. year. opened did Every said subdivision about stores a this opening year.

our more some. -- attached of that's The we do specs our spec kind and few majority more drives specs the affordable, We area tends But more to up be we very on townhouses. of Series a few closely, Smart are again, that doing a levels something Alan. control see going so

Alan Ratner

don't margin of and the offering. I more. I given just Last gross of some appreciate was the little but rate there margin pressure you one, those I give this a hoping saw I one XXX pullback everything can if points being comments bit buydowns under the you you and maybe you incentives about basis alluded squeeze makes on you're give Great. quarter, sequentially. clarity in all could margins guidance, sense. know to

Robert Schottenstein

big it's think rate it's believe unknown happen think question, lot on the to I Yes, a shared widely is a sales important downs isn't. going great I until or industry. to I our today, it the to critically promote using and and today, to by of in rates. to we Based what's generate I this what competitors, our know it's to And buy continue come. traffic don't when isn't going know

guess less Having said on third My in the down XX-year of as buydown. fourth day-to-day. move comes somewhat, of quarter. moderate down, our utilized is all It sometimes sales that, there. cost jumped the the to rate come about And cost stay week-to-week, sort impact In quarter, cost XX% the to the X/X margins. up does going the

we had reflective is probably I to think if guess. fourth quarter the

guidance One our margins Those years have know. you the don't an quarterly would of It's X the higher? XX.X% get do ago, we reasons can much they if question great is are and we interesting situation were think don't margins. been, give

will both news high that on we hand, to these also business said calls, But to and XX% probably say sustainable. margins and someone divisions, very returns. an this excellent business those margins, tend question off unprecedented, generate coming XX% not bad solid can or on a either is the are But margin -- XX% almost good you're long-term that else overreact, XX%, is news. and of number I a And previous in I've we when other your have very XX%, during approaching our

foundation it's coming cloud in we There's name see. to a settle a day, demand But starting of every and you or has or in -- metrics. can. and or And underlying we that poised there but we are I and feel XXXX, we're of shall -- in and very our construction do And be grow that it, good some new tariffs things We think to choppy. really bit. our this little I immigration new uncertainty building the about know think it's may home believe noise day. quarter-to-quarter, rates almost home building backdrop, there's still the word XXXX company business. I is home And very, solid while bit from interest -- inflation, home against whether the tremendous XXXX.

Phillip Creek

little every And just We on mean, I every buydowns one a really, and customer other community the to is comment, Alan, very be forth. interest so try rate different. and targeted.

especially the need to in affordable costs get on product, house. closing customers, the Some help with it more

in have for be may we costs. amount to the and get those So And a able really priced qualify cheaper people financing or not therefore, certain closing financing.

with we're costs help But and the to able again, get in house. closing them them

targeted many we fairly and rate try and to. to to things. those very in general, the to going really be specs that mortgage But it's But hard we're depends year. to have use just again, where expensive, what of need So are do to this very targeted try buydowns how predict we be on we have type of course, you

Robert Schottenstein

point selling is last started. just One of getting optimism, really season

that quite seasons better selling we'll ready some We're to this We're will go, well, last ready hopeful know others. know. when And year's as be to but we was are react. And than we're good.

Operator

the from Our of Seaport next Ken question line Research from Partners. comes Zener

Kenneth Zener

in what if X Good field morning, the everybody. have if the you was that. I of number missed homes it,

Robert Schottenstein

gave think field? Phil, in homes I it you was the X,XXX,

Phillip Creek

year, It's from X,XXX Yes. versus up last X,XXX. about X%

Kenneth Zener

you guys XX% I be Excellent. the -- you of the context be margin affecting units -- are to you said between able spread closing seeing closings backlog little to units? buydowns where given those you Wonder and -- believe was propensity might the mortgage order can if those a intra-quarter around to of the provide talk

Robert Schottenstein

hard one. That's a

XXX years around across are I'd spec our points or to to-be-built less, margins, been basis is case. built. little our margins XXX over markets, specs. the average that a points probably the that I Typically, somewhere the know whole That counterintuitive at on say XXX XXX not case. has which either least than are be margins to sale our of the equal always system basis at but sounds less sale seen Some to we've the to is spec

question, some are number take margins XXX cases, ready to a through the now to-be-built And to the specs rate pretty I've and margins margins buydowns. can our specs it's because right if mentioned including aggressive critically, last have sizable little Alan specs and need the throughout just a question, the reflected frankly, ones, go or close But of it our either of year. higher. our points. within spec critically basis terms spec are that's advantage it spec maybe during are a But them the XXX strategy, in blender important markets, good in same in to attractive of number full slightly put the Ratner's strategy our you we of the margins the that days, are lower, XX in of to had out, and we And course, because order year take a as

Kenneth Zener

you're better continuing affordable, than numbers so little though you And demand being the -- can mind give even think net function other Smart bit which higher finally between you point is right, pricing -- that because and an more on Series you the your that attracting have Series price Smart perhaps? a that a it's bifurcated, units. Is ASP Smart more kind of somewhat your actually you don't the Series, if topic of this

Robert Schottenstein

one. I've answer it but so looking you not lot this A the I is of don't think to depends so. for, got tell the you're apologize, I --

Kenneth Zener

Not at Don't worry. all.

Robert Schottenstein

It's community specific.

Many the button them Series of of have margins. lot of margins. communities the Smart the on premium quality Some lower-than-average to margins have community. some and hunts And a that of have right our back

line very going our returns, communities I where draw and past slightly We where throughout think, over in conclusion not I competitively margins have up margins our think other then than want some have hard to strong below. It's to builders. really I public to industry. They've a really XX% -- we say really up really generally but we this we We're when And very some compared feel high. strength highest got to we perform drop the a -- in, markets the they're because product that are there. don't a a this of the margins feel through communities. I'm favorably out of see look, to particular number move-up good bringing year, our upper held move our we community. number very, the the of quarter year, we've about a good to at with think compared quarter tier, we'll as And continue we're favorable bottom level --

of this hopes very that opening feel and now operating least number we be we're at they're And good good we're sales well perform a them over a half, high of we've of with standpoint. even a been though running well, to new have communities and so, perform to going to both year out with for from number or significant going margin communities a for year our for how

Phillip Creek

we things we on and the said, XX% we buyer. of more tends only Bob price business like or of well general, really again, product of first-time we is have still whatever, to as like to not we the diversity. And best focused markets be XXX located have have a diversification those average communities a to XX%, our geography as the really And sale in can. like price and One

give just to price. buy people We a reason not

look quarters, has from you our backlog XXX. If last X basically to at XXX ASPN gone the

sometime. We product kind But our we're our that diversity double changes that like seeing of our now, just having business. than right a move-up perform product. in entry little again, quarter-to-quarter better So

Robert Schottenstein

our color. just a give more to little of -- bit Some

even divisions climate. There Texas, very a Columbus, company Some about was Charlotte, Florida. in Orlando. about the a was this question number question are are of of that a There margins our strongest Chicago. strong We've in margins Dallas. running in had

Operator

Raymond from line from of the Buck comes question Horne James. next Our

Buck Horne

go Tampa market wonder to particular. you if in the just I back

demand are the curious time any guess, kind with around just hurricane right shifts particular, noticeable you saw are the and/or the I out cost insurance any in did and there Florida's if of -- coming Or Just hurricanes of demand hardening of, to frame? transpired you costs market shift due that that your impact just helping insurance related kind deal that? the how buyers to you seeing rising just of of October

Robert Schottenstein

in Do Tampa, I you you think might. live Buck,

Buck Horne

do. I I live Tampa. in do

we So well. market know the

Robert Schottenstein

suspect I you do.

answer You probably Look, started. I think question. own should your

Buck Horne

I'd like hear think... you to what

Robert Schottenstein

Right.

things for our many start think X I -- best top We've a in Tampa for has performing always of been builder been X Tampa time. years. long markets a many,

strong a in team, land have We excellent have lot position. confidence very team we and a there, of that

bit us I are alone telling slow than little Orlando that market has think checks didn't noticeably. hurricane all. so help than before hurricane. a But that we're started -- slowed, just things The the maybe at more to down more clearly not channel that, so --

as know reason. -- hurricane I the areas different really That there's well. a better. be know you there. mean, I to the exact it's suggest would little seems softening I pinpoint a think hit very different and to -- little hard a Sarasota I But

So some markets try to I bit address steps a We're answer. taking than little traffic now give We're doing our lot doing of better of I more in a could sales. wish it. and to we're generate a there to you

Buck Horne

has market hope a noticed hurricane. We've it's temporary. bit we Tampa certainly certainly the up quite Well, picked the in rental post Yes. that demand

home temporary kind before are a and they phenomenon making to just a So make temporary it's decision. decisions, of maybe decide a people

Robert Schottenstein

get X-year Tampa, I on to period. bullish X-, there's X-, through of to a to X-, lot X-, over think the be this got period. bullish Tampa. But on We reasons be

Buck Horne

I if immigration on rolled bullish availability And out. of any labor have industry-wide new or enforcement guess was is just thoughts then you gets I these wondering very around rules comments and Tampa. immigration secondly, just So kind new

high-level impact? how for or would brace you labor any any Just availability thoughts potential

Robert Schottenstein

and surprise, word I the we're industry now, But now, Joint okay. in okay. everyone meeting with surprise, the topic Right was at the I yesterday for that And to uncertainty. Housing Center was well I believe Washington hate suppliers as using a Right again, is both I okay. Harvard think manufacturers, is our as builders. big keep

surrounding think in the of on available, uncertainty I side certain there's development markets. interesting subcontractors land more that. particularly There's becoming stories

more market little But have to I to more I a continue looking to right site think that. -- think now. too, labor that's able market. don't We hope of problem I bit another. -- that and a contractors for seeing -- just I I don't that, we're with say we're work. that's don't

Buck Horne

then industry. it. context in Got are you that solid. And up at Agreed. putting of are quick, lastly, these very still levels. margins guys strong real obviously, reflecting obviously looks Returns the is just stock not very valuation Profitability good.

disconnect? to Any You're X.Xx take of on kind these levels. advantage forward trading at authorization buyback book flexibility ability repurchases this almost nearly maybe value thoughts or to accelerate or of the extend

Phillip Creek

every at looking Board that and that with discussing quarter. our continue We

about over the bought last As We a in last couple starting the said have years. the second XX% of stock I did we quarter amount is future year before, last to We accelerate growth. in the for shape. did purchases a back very, in have very $XX to We talked of quarter million year. finished ground. positioned get us The fair we on lots of sheet balance land up good X,XXX

So if as we try But to with we the well stock as do to we'll up something tap Obviously, that. that's really can positioned come far need to brakes. on we're grow repurchases, what do there but a continue the to et consistent we do. on our at that, we to we'll based look and needed economy felt doing we something cetera. been We've business, program

Robert Schottenstein

in see our Yes. a strategy change going I hard it's mean what today, forward. knowing know to we

Operator

[Operator Instructions]

of McCanless Wedbush. from question the Jay next Our comes from line

James McCanless

inflection more I for guess the But little they a down color, the XX% probably little drill see the way gross a quarter? conditions to I stay softer wanted I could. So And you gross if than XX%. thank that is on if saw an are margin, the sequentially in the at you might might that go quarters now, margin? should we down the right levels expect, when for fourth from Or we least it guys couple in of next

Robert Schottenstein

It's a hard answer. to question

I of buydowns, said, much quarter. can't upon exact we think of cost August. of to action became, time. I is occurs that's as the Again, rate impact And think quarter have are. buy the fourth the depending remember of things I or movement, in it all within the and because downs July the so first going either reflective where launched sort an I

of back they again, declining of and it the middle a It though but was rates rates you down quarter. be know, costs the more the not jumped were year, to throughout trend a up beginning cost selling bit, -- than expensive. just And all the back the went is the an while third not as moved the half snarky, to lines little rising option. rather not And became the

going even So I seem we what be in least week, to things do And leveling to terms of at bit this off, cost. think a coming maybe need to we're do. down little

next under now, to There's market. that week, on control. inflation an right and appears a Hopefully, who bond is all It So is the knows? Washington of lot impact action be. in certainly of having

don't better, on basis is think what be what saw likely of maybe reflective could the worse, quarter a a I go-forward we little little in although I So think a so. fourth we'll see

our to But see. and just have community, pace. maintain to good goal on settled pace a we've per in is we'll So that

anybody wish think don't precision, I with Jay, the I wish good knew I I is does. a barometer. I with knew so think -- And I but fourth quarter

James McCanless

that's should great the strong the wanted Anything some Very a it heavy colder to about I up Was between South. XX% know talk a you that And north. segments? weather we there heard really order had in pretty X could north. that? explain for you minute timing -- the X% growth the in answer. talk But only We've about discrepancy No, about Maybe people rainfall talk to just helpful. issues?

Phillip Creek

always comparable at it was you're Jay, as quarter Well, depends on what fourth year. how last as the number far looking

year, If look we X,XXX sold houses. only you at last

from XX%, the the people in quarter Florida favorably this Jay. had it fourth being as markets last a year about was good, at so Florida with really region the comparable in year Texas last a we not talk fourth pretty of sales up year quarter -- as in pretty a just being difficult. low quarter southern anything, far also standpoint, sales looking well going performed So weak But more than last again, fourth compared our certain year being

James McCanless

last had, me then this, I'm actually, and but X think -- you I more And Got correct the on I said it. Phil, got wrong questions. question if I

I capacity trying think that range standpoint, think on I off quarter to closings. for many mean, what Or of be? of a you really a productive could from and sell sold manageable Could can fourth during is that quarter given end you number you XX% -- a closed said close the I sold pull you what for and homes? I'm guess think XX%? M/I? in and do upper potentially guys the closed

Phillip Creek

the as that is theoretical course, could want completed I number Jay, of margin. the answer again, were at The field XXX be XXX. them mean, in is to whatever, we many we having about good finished, of or what today, a we type specs that can. XXXX many about Good number? how answer we at close track as stage now as right And houses as houses are a specs. talked XX% far houses those yes.

XX% could or so. it up get yes, to But

wherewithal it obviously cost very as down, We're somebody's before to trying that down you're telling more and so lot financial talked them higher the to a on than But days. XX and in closing specs when get effective we XX% you to Also be by have buy XX% We it's than Yes. the rate margins there, rate yes, different we know, a from put or not mortgage best cost to margins. specs out is there. can just on specs to much lower out throw trying built. have could

James McCanless

had, guess in you market land the other for perspective, competitors maybe you're land as they what setting if labor were then a it like X from a question as seeing the And quarter And you're I about they're cost up also aggressive what sounds I I are inflation? or still well ago? from the guess talk materials quarters seeing from a perspective, it year. some being things like seems could from maybe

Robert Schottenstein

it of our we're we but to cycle this on I we're improved XX In say, focused Suffice we sticks very little pick days. we are time. all, improve days it might may stable. time on on XX year, up XXXX, I cycle bricks, by think focused we'll some First that, it very good, a like just things and cases, by by prove don't several. think

We offset one about. to we're really we have trying margin haven't everything buydowns do this can during of that bricks that mortgage And ignore call. talked and rate cost materials and brought on the thing. about to pressures things. But we don't focused That's sticks those

site the trying side, not. believe more think locations. than development land buy competitive land stabilized prime land now. pretty It's has still not On it's I crazy, think On we're to but Look, I No. it's acquisition, I competitive. for work costs, that

not to not within outside we most going or that that to way, strategy We've buy how Our to always it's and to think where we we're the we pieces that. operate X been want. continue the only try do is stay That's core worked, and go X maybe action people is. and

And competition. on pieces, share, I a fair every of think our fair lose seek piece and there can of to don't we get lot get those but We share. our we be get, we some

a there more you So specific answer. know I think want I

than I think focused on. what for business the locations, it's is our more primarily prime competitive which is not

Phillip Creek

great, shop, times, sell school locations. better still on tough in Jay, develop careful. always transportation. the be times, those communities premier but some. the our really we think near focus stuff. want try better to track obviously own we so talks in very great do to We that they better XX% in Bob districts, about about, of We the We

as as average If up costs, look lot finished general, gone the lot in cost the last far cost you depending year raw the the on market, developed our XX%, has land at finished in lot to cost. XX%

our average from like has to sale in XXX backlog the sale talked last price backlog, bit as XXX. our quarters, ago, gone a X in when in at Now feel little price I I look average you

up. You always those get market prices definitely well-located land locking too price and -- we type try continued to But has be very We in premier, of I focused I Don't agree. go need mean, to on things. out, far pricing. on sure but not on get day, every getting sales only we're for taking. getting also we're risk margin, through make what pipe, for but sure we're focus pace to paid that. the we to the and doing paid make We stuff

We're So we year little and a again, we break to bricks. manage can. best try hoping get to on this sticks that

very definitely that, margin Bob to but out are there. these offset We to of other try there's pressures, as hard challenges on some said, focused

James McCanless

we and 'XX? guess, opened door I guys That's great you that level roughly since same -- the at just in you of expecting on 'XX pace, saw in are absorption run to monthly

Phillip Creek

of like of We'd again, on pace. factor to little a But a margin to pace We're going also. better on that are focused do improve and do bit do kind price-wise to you to want that. we you sure a are worked little trying wise, becomes have what what

Robert Schottenstein

But also are. we With where count. hopefully maintain growing community

We've those case lot to have dependent goal we've are Our a stretched also and worst goals, and growth of is grow maintaining pace. got upon goals current the company. base growth

Operator

question the time. like Phil Mr. ahead. no this conference Creek. would go back Please to at There are turn to I

Phillip Creek

joining next talk for and today, much you very we'll quarter. to us Thanks

Operator

you concludes you. for conference. today's Thank This participating. Thank

You may now disconnect.

M/I Homes (MHO) 29 Jan 252024 Q4 Earnings call transcript