Good morning, and welcome to Taylor Morrison's Q3 2023 earnings conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to introduce Mackenzie Aron, Vice President of Investor Relations. Please go ahead. Thank you, and good morning, everyone. We appreciate you joining us today. Before we begin, let me remind you that this call, including the question and answer session, will include forward-looking statements. These statements are subject to the safe harbor statement for forward-looking information that you can review in our earnings release on the investor relations portion of our website at taylormorrison.com. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those factors identified in the release and in our filings with the SEC, and we do not undertake any obligation to update our forward-looking statements. In addition, we will refer to certain non-GAAP financial measures on the call, which are reconciled to GAAP figures in the release. Now, I will turn the call over to our Chairman and Chief Executive Officer, Sheryl Palmer. Thank you, Mackenzie, and good morning, everyone. Joining me is Curt VanHyfte, our Chief Financial Officer; and Erik Heuser, our Chief Corporate Operations Officer. I will briefly cover this quarter's performance and then discuss the strategy behind our balanced operating model, which we believe is critical to our success in the current housing environment. After, Erik will discuss our healthy land portfolio and investment strategy, while Curt will review our financial results and guidance metrics. In the Q3, our team once again achieved strong results, including the delivery of over 2,600 homes at a better-than-expected adjusted home closings gross margin of 23.9%. At the same time, we flexed each of our capital allocation priorities to increase our land investment, retire debt outstanding, and repurchase our shares, all while ending the quarter with a significant liquidity position of $1.6 billion. In total, this drove a 21% year-over-year increase in our book value per share to a new high of nearly $47. Our core performance was healthy, with margins and returns remaining well above our historic norms, given the meaningful enhancements to our operating model over the last several years that we believe will continue to drive enhanced long-term performance. However, at the same time, it is important to recognize that this quarter reflected the temporary impact of last year's slower starts and sales activity and compared to record profitability achieved this time last year. We also acknowledge that the rapid re-acceleration in interest rates in September has once again injected some hesitation into the market and drove a moderation in sales momentum that has continued into October alongside typical seasonal slowing. As I will spend some time discussing, the strength of our diversified consumer strategy and balanced products portfolio better equips our home building and financial services teams to effectively manage these headwinds. As a result, I am pleased that despite the challenges, we are once again raising our full-year guidance for home closings and Adjusted Home Closings Gross Margin, as Curt will discuss. The resiliency of our business is a function of our diversification across buyer groups, emphasis on high-quality community locations, and return-focused investment strategy that has been years in the making. Our portfolio meets buyer demand across entry-level, move-up, and resort lifestyle consumers, with the necessary local and national scale to compete effectively. By consumer group, our Q3 net sales orders were comprised of our move-up category at 43%, our entry-level segment at 35%, and resort lifestyle at 22%. With different needs and preferences among these consumer sets, this approach allows us to operate both a spec and to-be-built operating model, with our spec business largely serving our entry-level and first move-up buyers, while our to-be-built homes are most prevalent in our second move-up and resort lifestyle communities. Approximately 55% of our Q3 sales were for our spec homes, while the other 45% were to-be-built orders, similar to recent quarters. This balanced, community-driven approach provides several important advantages. Our spec production offers cost-efficient consistency and repeatability that drives affordable, just-in-time offerings for our entry-level buyers, while our to-be-built business generates outsized, high-margin revenue when buyers pay a premium to personalize their home on their desired lot. This two-pronged production approach also improves our starts cadence, expands our land investment opportunities, and minimizes portfolio risk. For both spec and to-be-built homes, the strong utilization of our nationally managed Canvas option packages further streamlines our purchasing and construction processes without sacrificing option revenue. In addition to these production advantages, our consumer diversification is strategically critical, especially in the current environment, because each of these groups respond differently to interest rate volatility. On one hand, rate and affordability concerns are least acute for our resort lifestyle and second move-up buyers, as they typically have significant financial flexibility. In fact, the vast majority of our 55+ buyers pay all cash at a rate that is three times higher than younger buyers. Their financial strength is also evident in our sizable Q3 lot premiums and option revenue, which averaged nearly 110,000 in total and can contribute up to a several hundred basis point advantage for to-be-built gross margins compared to our spec margins. This is consistent with the long-term premium commanded by to-be-built sales prior to the pandemic that we expect will persist going forward. On the other hand, our entry-level and first move-up communities benefit from a deep demand pool that we expect will continue to grow in coming years alongside household formation, but with much greater sensitivity to pricing that often requires outsized incentives. Ultimately, both ends of the buyer spectrum are important to our long-term success, and we aim to serve each of our targeted consumer groups with appropriate product offerings, pricing and incentive tools, and an exceptional customer experience. Let me share a bit more color on the sales front. During the quarter, our net sales orders increased 25% year-over-year, driven by a monthly absorption pace of 2.7 per community as compared to 2.1 a year ago. This healthy demand allowed us to raise pricing in approximately 60% of our communities. It's worth sharing that 15% of our Q3 sales originated from online reservations at an outsized 45% conversion rate. By month, sales were healthy and consistent in July and August at healthy paces. However, alongside normal, slower seasonal patterns, the rapid rise in rates in September drove a moderation in sales momentum that has continued into October, as would be expected with this magnitude of rate volatility. In this current environment, our long-standing strategic prioritization of finance incentives is even more critical to our sales strategy. As you have heard me discuss before, the benefit to our homebuyer from finance incentives outweighs that of a price reduction by nearly 4-to-1 for our typical home. While we will also adjust pricing and other incentives as necessary to maintain appropriate sales paces in each of our communities, this finance-first strategy better protects our gross margins, community values, and consumer confidence, while also further differentiating our value versus resale homes in today's inventory-constrained market. There are a number of ways we leverage our finance incentives to best serve each borrower. One way is by providing closing cost assistance, which we have typically offered to most borrowers to offset various transaction costs. More recently, over the last several quarters, we have expanded our incentive programs with the purchase of forward commitment below market interest rates. These rates can be used on spec homes with quick move-in dates, as well as with to-be-built homes when combined with an extended rate lock for up to one year, offering permanent interest rate security. If rates improve during the build cycle, we offer a free float down. Lastly, we can utilize our incentives to provide temporary interest rate buydowns, allowing borrowers to ease into homeownership while still having the confidence that they qualified at the permanent note rate of a below-market fixed rate mortgage. These incentives can be combined as needed to optimize their effectiveness, and we are highly targeted with how we leverage these tools to meet each borrower's unique circumstances and based on each community's sales strategy. Generally, our entry-level and first move-up communities prefer rate buydowns to aid affordability. As a result, in the Q3, while only 18% of our closings utilized a forward commitment, an outsized 50% of those were first-time buyers. On the other hand, our second move- up and resort lifestyle buyers, which, as I highlighted earlier, are much less reliant on financing, tend to favor closing cost assistance and other concessions to minimize upfront cash out of pocket. In total, we tend to attract well-qualified consumers, even among our first-time homebuyers. To illustrate, in the Q3, among our buyers financed by Taylor Morrison Home Funding, which achieved an all-time capture rate of 88%, credit metrics remained excellent. Borrowers had an average credit score of 753, provided average down payments of 24%, and earned average household incomes of nearly $180,000. This strength extends to our backlog, where customers are secured with average deposits of more than $62,000 or about 9% per home, providing critical financial commitment that minimizes cancellation risk. In addition, our financial services team has thorough prequalification standards and is diligent in locking in our backlog buyers' interest rate to further reduce risk and provide confidence during the build cycle. Equipped with all of these compelling programs, we are well-positioned to navigate the headwinds from today's higher interest rates and macro uncertainty. To wrap up, let me once again reiterate that our strategy will remain focused on serving our buyers with appropriate product offerings, pricing, and incentives, and an exceptional customer experience. We are focused on capitalizing on the benefits of both spec and to-be-built production, driven by the needs of our targeted consumer groups. Together, the exceptional quality of our buyers, the location of our communities, and ability to use powerful finance incentives to overcome interest rate headwinds enables our business to be resilient. Our experienced and dedicated team members are focused on continuing to drive smart, accretive growth, and we will remain nimble in our operating decisions as we move into the new year, supported by significant liquidity and a healthy, committed backlog. With that, let me turn the call to Erik. Thanks, Sheryl, and good morning. Our land investment approach is focused on achieving capital-efficient, accretive growth in markets that are well-positioned to benefit from long-term demand drivers and meet the needs and preferences of our well-balanced consumer sets. At quarter-end, we owned and controlled approximately 74,000 homebuilding lots. This represented 6.1 years of total supply. With 42% of these lots controlled via options and other off-balance sheet structures, our supply of owned lots was 3.5 years. When underwriting new deals, we evaluate duration risk and long-term return potential to determine the optimal financing vehicle for each asset, weighing the capital efficiency of off-balance sheet financing with the cost of that optionality. With a strong balance sheet and multiple financing tools available, we will continue to balance our owned and controlled lot inventory within our targeted ranges. In the Q3, we invested $320 million in homebuilding land acquisition and $232 million in development, for a total of $552 million. Year to date, our total land investment has been approximately $1.3 billion, leaving us on track to invest around $1.8 billion for the full year, as compared to $1.6 billion in 2022. Looking ahead, we expect to further increase our land investment in 2024, with an initial projection of total spend of approximately $2 billion based on our robust deal pipeline. For new lot acquisitions, we are primarily focused on providing home closings for 2027 and beyond, as we are either fully subscribed or on track for the next three years. This provides us with significant flexibility on the land acquisition front. On the development side, our priority is continuing to convert our attractive existing land portfolio into new community openings to support future growth. In addition to this growth, we are equally focused on the efficiency of our new communities. As we have shared previously, we have increased the average size of our underwritten communities by approximately 50% in recent years, allowing us to magnify our scale with a like level of resources. As an illustration of this pivot and impact, we can share that in Houston, for example, we have reduced our outlet count by half since 2018, while driving greater autonomy through self-developed, larger communities, as well as paces that are significantly higher. Ultimately, we are driving for greater overhead leverage and returns here in Houston and across the business. This is just one example of similar strategic shifts across our portfolio that are supporting our long-term annualized sales pace goal in the low three range. With that, I will turn the call to Curt. Thanks, Eric, and good morning, everyone. In the Q3, our adjusted net income was $180 million, or $1.62 per diluted share. Including an inventory impairment and charge related to our early debt redemption, our reported net income was $171 million, or $1.54 per diluted share. During the quarter, we delivered 2,639 home closings at an average closing price of $611,000, which produced total home building revenue of $1.6 billion. This was down from $2 billion a year ago. Cycle times for homes closed improved meaningfully in the Q3, with a nearly eight-week sequential reduction, driven by clearing of older backlog homes and improvement in many of our trade categories. This faster-than-expected normalization in most markets helped to offset hurricane-related closing delays in Florida. While back-end construction schedules remain somewhat extended due to tight labor capacity, we are encouraged by the normalization we have experienced, especially in this year's new starts. As a result of this improvement, we now expect to deliver approximately 2,950 homes in the fourth quarter. This would drive a full year total of around 11,250 homes as compared to our prior full year guidance range of approximately 11,000 homes. We continue to expect the average closing price of these deliveries to be around $625,000 for the full year, including approximately $615,000 for the fourth quarter. Our teams are focused on managing starts to align with sales, plus targeted inventory levels on a community-by-community basis. At quarter end, we had about 2,700 spec homes available, of which only 280 were finished, with a skew towards our entry-level communities, where first-time buyers prefer quick move-in homes. We started approximately 2,800 homes during the quarter, equaling 2.9 starts per community per month, which was down from 3.5 in the prior quarter, but up from 1.5 a year ago. As a result, we ended the quarter with about 8,100 homes under production. During the quarter, our Adjusted Home Closings Gross Margin of 23.9% exceeded our guidance due to favorable mix and less incentive cost pressure. Including a $12 million inventory-related charge tied to one legacy community in the West, facing a scope change due to municipal requirements, our reported home closings gross margin was 23.1%. For the fourth quarter, we expect our home closings gross margin to be around 23%. The sequential moderation reflects an increase in expected incentives on spec homes sold and closed during the quarter due to the recent increase in interest rates. This would result in a full year adjusted home closings gross margin of around 23.7%, up from our prior guidance of approximately 23.5%. Turning to financial services, our team produced revenue of $40 million at a gross margin of 42.2%, aided by an all-time high capture rate of 88%. This was up from $28 million and 26.5%, respectively, a year ago. As Sheryl noted, our net orders in the quarter increased 25% year over year to 2,592 homes, driven by a 26% increase in our monthly absorption pace to 2.7 per community and a flattish ending community count of 325 outlets. As we look ahead, we continue to expect our community count to be between 320 and 325 at year-end. Cancellation rates remain consistent with long-term norms at 11.4% of gross orders versus 15.6% a year ago. Taking a step back, year to date, through the end of the quarter, our monthly sales pace averaged 2.9 per community. As we shared last quarter, going forward, we are targeting an annualized absorption rate in the low three range as compared to our historical low-to-mid twos. The increase is a function of the shift in our community mix and geographic footprint as we have positioned our portfolio for higher long-term returns. SG&A, as a percentage of home closings revenue, was 10.4%. For the year, we are still forecasting an SG&A ratio in the high 9% range. To wrap up, we ended the quarter with a total liquidity position of approximately $1.6 billion. This included $614 million of unrestricted cash and $1.1 billion of available capacity on our revolving credit facilities, which remain undrawn outside normal course letters of credit. Our homebuilding net debt-to-capitalization ratio was 18.8%, as compared to 34% a year ago. During the quarter, we redeemed the full $350 million outstanding principal amount of our 5.625%, 2024 senior notes. As a result, our next senior note maturity is not until 2027, leaving us with significant runway ahead. Since 2020, we have repaid approximately $1.8 billion of senior debt, driving a significant reduction in our net capitalization from 46.8% in the first quarter of 2020, as we have successfully executed our post-acquisition debt reduction strategy. In total, these payments have reduced our annual interest expense by about $105 million. Due in part to these ongoing efforts to fortify our balance sheet, along with strong operating momentum, we are pleased to have recently received an upgraded credit rating from S&P Global to BB+ from BB, with a stable outlook. Lastly, during the quarter, we spent $100 million on share repurchases. Since 2020, we have deployed approximately $865 million to repurchase our shares, reducing our diluted share count by about 33 million or approximately 30%, driving higher earnings per share and returns for our shareholders. At quarter end, we had $176 million remaining on our repurchase authorization. Going forward, we expect to maintain our disciplined and opportunistic capital allocation framework as we evaluate our main priorities of investing for future growth, maintaining strong liquidity and balance sheet health, and returning excess capital to shareholders. Now, I will turn the call back over to Sheryl. Thank you, Curt. As we have discussed, the Q3 was healthy despite the headwinds from last year's slower activity and the interest rate pressure that unfolded during the quarter. As we head into year-end, there are many factors at play, complicating what is always a high volume push for the industry to deliver homes to customers and ready inventory for the coming spring selling season. The sharp spike in interest rates over the last two months has once again pushed affordability to unsustainable levels for many buyers, especially at the entry level, and is weighing on buyer confidence and urgency, even among some with the financial ability to move forward. With uncertainty around the Federal Reserve, a wider than normal spread between mortgage and treasury yields, and significant headline noise, I expect that these issues will evolve and stabilize when there is greater clarity on the Fed's timing of any future actions. Nevertheless, I am confident that our balanced, consumer-driven portfolio and experienced, dedicated team at Taylor Morrison is well-positioned to excel during these market disruptions, as is evidenced by our increased guidance for the year. While the near-term outlook is somewhat cloudy, the intermediate to longer-term opportunity for housing and Taylor Morrison remains clear. Our country is significantly undersupplied, and there is an undeniable need for new construction based on the aging evolution of younger generations to meet the needs of today and tomorrow's consumers. At the same time, we will be working to solve for the current multimillion rooftop deficiency that exists in our country today. Thank you to all of our team members for another great quarter. Before we wrap up, I would be remiss not to share that Taylor Morrison was recently awarded two brand-new accolades, which are a testament to our talented and dedicated team. The first comes from Newsweek's "2024's America's Greenest Companies," where we were included among just 300 U.S. companies recognized for progress in positively changing its sustainability footprint. The second comes from U.S. News & World Report, where we were included on the publication's inaugural Best Companies to Work For list. With that, let's open the call to your questions. Operator, please provide our participants with instructions. Thank you. If you would like to ask a question today, please do so now by pressing star followed by the number one on your telephone keypad. If you change your mind and would like to be removed from the queue, that is star followed by two. When preparing to ask your question, please ensure that your device and your microphone are unmuted locally. Our first question comes from the line of Carl Reichardt with BTIG. Carl, please go ahead. Your line is now open. Thanks. Morning, everybody. Sheryl, I wanted to- Good morning [I will have to ask a question about buyer hesitancy. So, is your sense that some consumers are hesitant because they're concerned, not, not about the mathematics of home prices, but a fear that home prices might come in? Read headlines, they see a lot of, of conversation about this topic in the press, and I'm just curious if, if that's something you're hearing from your consumers right now. Good morning, Carl. Thanks for the question. You know, that's not what we're hearing. We're hearing that there's just overall just, you know, there's a lot going on right now. There's a lot of attention around, you know, what's happened to interest rates, the way the media is portraying that, and honestly, the impacts it has on true affordability when you look at the difference of where we were a year or two ago. So I, I don't think it's specifically that they feel that prices are gonna drop. I think actually, at some level, Carl, it's the opposite, because inventory is so tight that I don't think they're expecting, that they're gonna see -- that we're gonna see a reduction in pricing overall. Once again, I think it's as much around just general affordability for that first-time buyer. But as I said in my prepared remarks, though, it's a very deep pull. So we're seeing the traffic, we're seeing demand, it's just working with customers to get them qualified. And then when you look at the other consumers, I think they're being appropriately diligent in understanding what choices are and what's happening. When I look at our October trends, you know, we're still up. I expect we'll still be up considerably year over year. But to say that it's the same that we saw, you know, the kind of early summer when rates were in the mid sixes versus eight, I think would be unfair. Okay. Thanks for that, Sheryl. I appreciate that. And then secondly, I was interested in the SG&A line, and as you look going forward. We've talked before about overall initiatives to improve asset turns at Taylor Morrison and construction times. And can you talk a little bit about the fixed cost side, SG&A, how you're feeling about how that's laying out and what you might see in terms of long-term ability to improve that ratio as you go? Thanks. Yeah. Good morning, Carl. How are you? Good. Carl, I can attack that for you a little bit. SG&A, I think historically has always been roughly about... The G&A side of it, it's always roughly been about half of our SG&A in total. So, you know, that's something we look at, and a lot of it's driven by kind of our fixed costs with our people, office facility, those types of things, and we're always looking at ways to kind of monitor and evaluate those costs on a go-forward basis. The bigger question for us is on the kind of the variable side, which is kind of where we're up a little bit year-over-year. And that was in large part due to our, our commissions, our external commissions. While our brokerage co-op rate is consistent, over time, it's just that we're paying a little bit more now today than we were a year ago, for every transaction. And then, of course, we had a little bit more, from a marketing standpoint, relative to adjusting to kind of the conditions of the market today. Okay. That makes sense. Thanks very much. Appreciate it, guys. Thanks, Carl. Thanks, Carl. Our next question comes from Paul Przybylski with Wolfe Research. Please go ahead, Paul. Your line is now open. Thank you. I guess, to start off, I mean, I appreciate the demand, you know, commentary. I was wondering if you could provide us maybe, you know, the monthly cadence of absorptions through the Q3 and then into October. Yeah. You know, good morning, Paul. July was good. August was even stronger, which is honestly quite unusual when I look kind of historically at the numbers. September was not far off of August, but we definitely saw a tiny pullback in September. So cadence was pretty steady, with August being the peak. And as we've moved into October, as I've said, we're still... You know, I think from a historical perspective, from a seasonal perspective, things are still looking really nice, and we're seeing good traffic and sales. It's just I can feel the difference from what we saw earlier in the summer. Okay. I guess, you know, as you look at your traffic, any color maybe on the percent of traffic that's not qualifying, versus maybe the second quarter and a year ago? That's an interesting, interesting question. I mean, our traffic year over year for the quarter was up. I would tell you that our conversions, when I look at, like, our conversions, for example, on our web, they're higher. When I look at conversions on, like, our chatbot, they're higher. When I look at our reservations, they're higher. I, I think what I'm-- what I really want people to take away is, once again, on that first-time buyer pool, it's deeper. It just takes- if it used to take, you know, a five-to-one to get a conversion, I would say in today's environment, it's, you know, seven-to-eight-to-one. Once again, that's gonna depend on community and market. We have the tools that are helping our buyers, even in today's environment, kind of withstand the challenges that have been brought by interest rates and pricing and just kind of the overall inflationary environment. But, it just takes us a few more certainly on that first-time buyer. Okay. Thank you. I appreciate that color. Thanks, Paul. Our next question comes from the line of Matthew Bouley with Barclays. Matthew, please go ahead. Your line is now open. Good morning. You have Anika Dholakia on for Matt. Thanks for taking my question. So first off, wondering if you can provide a little more color on the Buy, Build, Secure program. Specifically, how are consumers considering this versus other incentives? And then how does this differ from the buydowns you guys are currently offering, and then more specifically, how large of an impact on margins? Thanks. Yeah, thank you for the questions. What I really obviously was trying to get across in our prepared remarks was the power of our incentives and how necessary they are when you compare to, you know, 2021 rates of about, you know, 3% and what we're seeing in today's market of 8%. So if I run through the programs quickly for you, without going into too much detail, you know, about 94% of our closings in the quarter had some sort of discount points paid by either the buyer or seller. That number is not really any different than what you would have seen historically, maybe somewhat influenced by the percentage of cash, because really everyone that's got a mortgage, we're helping in some way. And on those discount points, the average was probably just under about 2.5%. And then if you go to the temp buydowns, where the costs are calculated based on the loan amount, that's been running about 2.25% for a two-one buydown. Those costs are obviously paid by the seller, and that was only about 13% of our Q3 closings that used a temporary buydown. And then to your question specifically, but I think it's important to see the stacked effect, is our forward commitments, which include our Buy, Build, Secure program for extended lock programs. And this is where we purchase a forward tranche of money on a specific date. We're doing that potentially daily, weekly, depending on the need, and that allows us to offer an interest rate below market. We have to buy those funds before the customer is in contract, and that way, honestly, the dollars are not included in our seller contribution limits, limitations. But when we look across the portfolio, that was only 18% of our Q3 total closings. So when you put that against the margin, it's actually a very small, kind of less than 1%, on forward commitments, specifically, across the portfolio for Q3. Interestingly as well, the average interest rate for our forward commitments in Q3 was just about 5.5%. Hopefully, that gives you a little bit of an overview. Super helpful. Thank you. And then I guess my second question, looking a little at mix. So in second quarter, spec to BTO is about 60/40, I believe. Now we're seeing Q3, 55/40 spec BTO. So how do you expect this mix level to change based on the rate, you know, movements, the rate environment we're in? And then can you just remind us on the margin spread between spec and BTO? I think I heard you say several hundred basis points. I was wondering if that's still that 300-400 basis points range, from previous quarters, or if you're seeing that narrowing at all? Thanks. Yeah, maybe we'll tackle this one together. I think in fourth quarter, Curt, we would expect the specs to be, you know, probably closer to what we saw in Q2, given just availability. Is that- No, I would say so. I mean, generally speaking, as I think we've said before, we've been kind of. Our mix between spec and to-be-built has been 60/40, 40/60, over time, and today we're, we're a little more heavy relative to specs in that kind of, I guess, ratio. And we would probably look to continue to see that go forward here for the next quarter or so, relative to that. But, again, it's very consumer-based for us. We kind of mirror that program relative to the communities that we have and to the customers that we're serving, and today, that mix is just right, right in that, like we said, 55% spec and 45% to-be-built. And then when we look at the margin impact, which I think was the second part of your question, yeah, you're right. You know, there's a spread there. There's generally a few hundred basis points, 300-400. That can get larger when I look at the 55+ resort lifestyle. You know, so much of that is when you look at that consumer picking their own lot and their design features in the house. I mean, our spec lot premiums are about half of to-be-builts, and that's really focused on the active adult. And our option revenue is about 50% higher than our specs. So when I look at the portfolio, that 300-400 basis points is about right. When I look at the active adult, it's actually, the spread's even greater. Awesome. Thank you, guys. I'll pass it on. Thank you. Thank you. Our next question comes from Mike Rehaut with JP Morgan. Please go ahead, Mike. Your line is now open. Hi, guys. Good morning. It's Doug Wardlaw on for Mike. If I heard it correctly, in terms of seasonality, you said August was stronger than usual, September kind of tapered off a little bit from August, and October was still looking nice from a historical standpoint. So I'm just wondering, looking forward in terms of the rate environment we're in, where do you guys think things will be in terms of typical seasonality moving into 2024? Do you think it continues to stay in line or just very much so varied on where the rate environment goes moving forward into next year? I think that will be always weighing on, you know, the minds of the consumer today, along with some of the other macro factors that we're seeing, I think, consumers being faced with. But I get grounded very quickly on the lack of supply that we have and the needs of consumers to get shelter. So as I look forward, you know, once again, assuming no significant shifts in what we're seeing in today's environment, this kind of rate for longer, I think we all have to be prepared for that until the Fed gives some clarity around next moves, around MBS. I think that's going to continue to weigh on folks. But when I look at next year, I think across the industry and certainly for Taylor Morrison, we expect to see, you know, movement upwards on both sales and closings. Sales starts and closings. Got it. Thanks. And then lastly, in terms of, you know, incentives on a market-by-market basis, were there any particular markets that were surprising in terms of not needing as many incentives offers or more than you anticipated? And do you feel that trend, if there is one, will be available moving forward? Yeah, it's a good question. You know, when we look at where we're spending, say, our forward commitment dollars, there have been a couple surprises. I would say not surprising is where we have the greatest penetration of first-time buyers, is where we're seeing most of those forward commitment and buy down dollars show up. Places that we really haven't used much forward commitment, the consumer just hasn't needed it in these communities, would be places like Sacramento, the Bay Area, Seattle. I mean, we've barely used forward commitments in our toolkit at all. When I look at places where we have a more affordable consumer, let's say Orlando and Houston, that's where we've probably leaned in a little bit more on forward commitments. Once again, I would say as a percentage of total incentives, a pretty small number. But a wonderful marketing tool that starts the conversation and helps us give confidence to the consumer if they're gonna buy, you know, with an inventory home that's gonna close in 30 or 60 days, or they're working on a Buy, Build, Secure because they're gonna select their lot and build their home, to be able to lock them in with that kind of confidence for 12 months is a very powerful tool. Got it. Thank you. Thank you. Our next question comes from Alan Ratner with Zelman and Associates. Alan, please go ahead. Your line is open. Hey, guys. Good morning. Thanks, as always, for all the great color so far. Sheryl, first on- Good morning ... on the rate buy-down topic, ... Good morning. So if I'm thinking about this right, 18% of your closings are kind of the forward commitment, full 30-year buydown, another 13% temporary buydowns, I think is what you said. So roughly, you know, 30% or so- Yep A third of your business is kind of seeing a rate buydown of some sort right now. We've heard from some other builders a share much higher than that. And, you know, I'm curious, A: you know, why not offer more across the board in an effort to maybe drive that absorption rate closer to that low three target you guys have? And I guess within the fourth quarter guide for margins to be down 100 basis points, you know, are you able to share kind of an explicit forecast on how high that share ultimately does go in the fourth quarter? Yeah. Thanks, Alan. There's a lot in there, so let me try. So the reason I went into such great detail on kind of the different programs is I do think there's some real confusion out there when we talk about discount points versus forward commitments. We've always had, you know, some form of discount points or closing cost assistance. We didn't even talk about the buyers that really just want some support on cash out of pocket, and that's more important to them. So that's why that 94%, I think that's getting blurred across some of the chatter out there on how many are getting forward commitments. So when I look at 30% and you align that, you know, with our first-time buyer mix, you align that with our cash business, it actually makes a lot of sense. We have those programs available, for each of our consumers, so it's really about once they come in the door and we work with them, understanding which program is going to make the most sense for them to get that payment where they need it. When I look into Q4, generally the fourth quarter, Alan, is a higher, you know, penetration of inventory homes. I expect that we'll see that in this Q4 as well. When I look at the penetration of inventory homes and backlog today, it's higher than what we would have had in Q3, so that's going to have an impact. We also benefited in the Q3 from some pull-in of some larger, higher margin, which kind of blurs the Q3 and Q4 margin trajectory. What I would keep focused on is we're taking our margin up for the year from what we said last quarter. That, that's really helpful, Sheryl, and yeah, I appreciate the discount points because I, I feel like we might be talking apples and oranges across some of these disclosures in the industry right now. So, I think so. Appreciate that. Need to be separated. Yeah, exactly. Now, hopefully, others can follow suit and provide similar disclosures as you guys do coming forward. Second question. You know, I was, I was hoping you could help me better understand kind of the bridge that gap from your current absorption pace, which is running, you know, for the year, you're probably going to end up somewhere in the high twos, 2.7, 2.8 range, maybe, versus that intermediate-term target, I guess, of something in the low threes. So, you know, basically, y-you, you expect your absorptions to probably climb 15%-20% from here. What time frame should we think about that occurring in? What, you know, should we think about the mix of your business doing as that happens, either from a price standpoint, a margin standpoint? You know, assuming the market kind of stays where it is today, rates stay elevated, and, you know, maybe there's some choppiness there, what needs to happen for that absorption rate to move higher into that low 3 range? Yeah, I think the timing is moving into next year, Alan. Obviously, we're not giving any specific guidance for 2024 yet, but I think as we've said all year, that, you know, we've got a shift in our overall mix of communities. Erik talked about some of those, where we've taken communities with more positions to really push mix and returns. So as you look into 2024, I'm with you on, you know, 2023. As we move into the fourth quarter, with the environment we're in, we'll probably be somewhere in that high-2 number. But as we look at 2024, you should expect something in the 3 range, the low-3 range. Alan, from an underwriting perspective, we've been underwriting to kind of that 3 threshold for some time. And so just ensuring that the math makes sense for every submarket and every asset, so that, you know, we're looking at the elasticity. And there have been times in the cycle where we've really pushed for price and margin. And so we've got that kind of, you know, that lever to pull, between those two, and so we're just ensuring that from an underwriting standpoint, we're set up for the future. Got it. Appreciate that, guys. Thank you. Thank you. Our next question comes from the line of Ken Zener with Seaport Research. Ken, please go ahead. Your line is now open. Thank you. Good morning, everybody. Morning. Hello. Good morning. Oh, good. So I really do appreciate your disclosures. I think it's actually kind of raising more questions than answering, which, you know, that's probably why people don't do it, but thank you very much. I wonder if you can summarize- Sure ... these incentives. I know, you know, you give an inch. But is there a way for you to talk about the incentives you've offered related to these different aspects that are part of the operating environment, you know, to influence buyers? You know, is there? Did you say it's 4% or 6, or where? In perspective, obviously, you're giving us much more detail. ... Yeah, I can try and cover maybe. So say that last thing one more time, Ken. Builders say what? Oh, yeah. There's just some of the builders have talked about it being, you know, 4% or 6% of ASP. And while maybe while you're thinking about that, 'cause you did give us such good granular details, is there a way to think about your options as a percent of your ASP? I know you mentioned 110,000 on your to-be-built, but is there a total number you have for options- Yeah -% of your reported ASP? Yeah, we've run for years and years, somewhere in that 15%-16% range, and honestly, we haven't seen much movement there. The other area you didn't ask, but I'll mention, that we haven't seen much movement in, is our square footage range over the last many years. You would think that given the environment, we're seeing square footages really move down, and that just doesn't seem to be the case, particularly on our to-be-builts, when the consumer is the one that makes the choice of what product they want to build. You know, with respect to more color on, the programs, you know, I, I think a couple things worth mentioning. You know, obviously, we've seen interest rates double since 2021, but even having said that, most customers have really expected that the low rate environment of 2021 is not coming back, and home values have remained relatively steady. So what that has done is obviously made a significant impact on a consumer's payment for the same house and the income requirement that would be necessary to buy what was a $500,000 house two years ago versus that $500,000 house today. Generally, Ken, I would tell you that we've been since the consumer has really kind of met us halfway, generally speaking, we've been marketing 5.49, 5.99, 30-year fixed rate. There may be a really affordable community or two where we would look at a 4.99, but generally, we're not having to do that. In fact, if you look at the rate, the coupon note rate of our closings in the Q3, I'm gonna tell you it jumped to something like 6.20, compared to 5.8 last quarter. So the consumer's moving along with us, which has us generally marketing rates in the fives. Thank you very much. Very good color. Of course. Our next question comes from Jay McCanless with Wedbush. Jay, please go ahead. Your line is now open. Good morning, everyone. Thanks for taking my questions. Quick one on capital allocation, especially when I look at the June 2027 notes trading at a decent discount to par. Could opportunistic debt reductions be part of the capital allocation discussion going forward? You know, you guys raised your land spend number for 2023 last quarter, and you're expecting land spend to be up in 2024. I just wanted to kind of balance that against the potential to start chipping away at that stack in 2027. Yeah, good morning. Yeah, never say never, right? I think we're pretty grounded in our overall capital allocation strategy. With the payoff of our senior notes here for Q3 that we're going to be doing first quarter of next year, we have those behind us now. And so right now, our number one priority is, we'll be investing in the business. We'll continue to be opportunistic from a share repurchase standpoint. And to your point, we could... You know, we'll continue to look at whether or not we wanna take anything else out from a senior note standpoint. But to your point, that would be an opportunistic kind of perspective. Okay. And then, I guess, could you talk about, I think you said during the Q3, you raised prices at 60% of communities. Have you been able to hold that type of pricing, given what you've seen thus far in October? Are you having to maybe talk about what type of pricing power or pricing stability you're seeing thus far in the quarter? Yeah, we haven't... I, I don't know that I could give you a tremendous amount of color for October on what percentage of the communities we've raised prices, but I would tell you that I don't think there's anything meaningfully different in October than what we've seen in Q3, with the exception of probably leaning in a little heavier with that first-time buyer on the forward commitments. We're always going to start there, Jay- That's great. Thanks for the question. -because of the power. Yeah, you betcha. Our next question comes from the line of Alex Barron with Housing Research Center. Alex, please go ahead. Your line is now open. Yeah, thanks. Sheryl, I remember a few quarters ago, you used to talk about, maybe it was a couple of years ago, you used to talk about, your, your analysis would show that consumers could pay up higher interest rates.... I'm wondering, you know, if you did that same analysis today, is that still the case, or are we kind of at that level where, where, you know, the maximum i- is, is what- Yeah What your analysis used to show? You see what you're wanting? Yeah, no, we still do that analysis every quarter, so I appreciate the question, and I think it's exactly what you would expect. When I look at the conventional buyer, we have still nearly 400 basis points when I look at the fourth quarter closings. Like I said, they, on average, close with an average note rate of 6.23, and with that 6.23, they still had nearly 400 basis points of room. So I'd say very, very healthy on the conventional consumer, and once again, that's just, that's just on one bucket. That's before we look at assets and other qualifying needs. I think probably more telling is what we've seen on the FHA side, and we have seen a little bit more compression. If I were to go back to, you know, this time last year, we probably had a close to 240 basis points in their qualifying kind of room, and today that has dropped to 140 basis points. Probably more important is when I look at the backlog, I would tell you that our backlog, when I look at all of their qualifying kind of conditions, are in a very good place. The conventional buyer, when I look at incomes and LTVs and FICO scores, ratios, they continue to improve, and on the FHA side, they continue to get a little bit tighter. Got it. My other question was, in terms of sales pace, can you describe how the entry level versus move-up versus active adult are doing lately? Yeah, actually, our strongest pace for the quarter was entry level. And then followed by move-up. Active adult would have been third up, and that would be expected in Q3, when generally we're in kind of the summer season before moving to the shoulder selling season. So as I said, a deep, deep pool of first-time buyers, and so we're seeing the traffic, and we're getting the, we're getting the sales. We just have to put the right programs forth to make sure we can get them qualified. Got it. Thank you so much. Thank you. Those are all the questions we have, so I'll turn the call over to Sheryl for closing remarks. Well, thank you. Appreciate everyone joining us for our Q3 results. I wish you all a wonderful fourth quarter, a happy holiday season, and we'll look forward to talking to you in the new year. Bye-bye. Thank you everyone for joining us today. This concludes our call, and you may now disconnect your lines.