Building and Building Products Analyst here at Citi, and we're very pleased to welcome CEO Paul Romanowski and SVP of IR Jessica Hansen from D.R. Horton, America's largest homebuilder. So Paul, Jessica, thank you for joining us.
Thank you.
I think in terms of format, we'll just jump right into Q&A if that's okay, and certainly we'd like to take questions from the audience as well. I guess maybe starting off, I mean the Super Bowl is traditionally the beginning of the spring selling season. So can you talk a little bit about the strength of demand that you're seeing into the selling season?
Yeah, I think we've been encouraged by the early spring selling season, the signs. We're still just on the leading edge of it, but traffic's been consistent and demand's been good, and I think in line with our expectations thus far.
Great. And can you talk a little bit about sort of incentive levels and how those have trended over the last several quarters and your positioning there?
Yeah, I think that the incentives have been relatively consistent, and we've been utilizing rate buydowns as one of our stronger incentives, and as rates have moved some, we've needed to adjust that. But been relatively consistent as we look at the early part of the spring selling season.
Can you talk a little bit more about the buydowns and the sort of success in the buydowns that you saw last year? What percentage of your buyers are utilizing it, where you're buying down to, kind of how you position there?
Sure. We've continued to see that be our most popular incentive in terms of uptake, and it's really just the best way that we can directly impact affordability without having to adjust the base pricing of the houses. So we've continued to utilize it pretty heavily. With the increase in rates in the December quarter, really in November when rates moved, we did see an increase in the percentage of buyers. Roughly 70% of our buyers in the December quarter received some form of a rate buydown, and for us that's generally 1 to 1.5 points on the 30-year fixed-rate life of loan.
Great. In terms of sort of rule of thumb around potential impact of profitability or how the buydown impacts your margins, can you remind us how that works?
Yeah, usually for a quarter point, it costs us about a point. So 400 basis points of gross margin to buy down the rate by approximately a point. That can ebb and flow based on market conditions, but that's the general rule of thumb.
When we think about your buyers, understanding that pretty much your whole offering really skews towards affordability, would you differentiate between an express buyer or maybe versus some of the higher ASP homes, or how would you differentiate between buyer type and maybe just talk about sort of the interest rate sensitivity of your buyers?
Yeah, I think we certainly see more sensitivity at the affordable price points. 55% of our buyers still are first-time homebuyers, and that's paramount to their qualification and comfort with the payment. Still important as you move up the price curve, but not as important when you get into our move-up buyer demographic.
Understanding it's still very early in the spring season, from an MSA perspective, is there any kind of regional trends that you'd point out in terms of strength in pricing or demand?
We've seen pretty consistent demand across our footprint and across our MSAs. We don't really have a geographic area today that gives us concern or that we've seen move beyond what we've seen as far as early spring demand.
Can you remind us in terms of community count growth for 2024, deliveries growth, what you've guided to and sort of how that positions you maybe against what the broader market might be doing?
Sure. We've guided to 87,000-90,000 closings on our for-sale side of the business for this fiscal year. We did a little bit better than expected in our December quarter, so we did move the midpoint of our guidance for the full year up by 1,000 units to get 90 in the top end of the range, which equates to about a 2.1 housing turn in terms of the number of homes we start the year with versus what we close in that forward 12-month period, which is really right back to our normalized turnover because our cycle times have improved. In terms of community count, we've seen some really strong community count really for the first time in quite some time.
We were up about 14% in average active selling communities on a year-over-year basis at the end of December, and that had stepped up from a 10% increase in the September period on a year-over-year basis. So I think our base case would be, although we don't give formal guidance for community count, and it's one of the hardest things for us to predict because there's so many moving pieces, that for another quarter or two it probably stays pretty elevated, and then once we cycle through a 12-month period, we'll still have some community count growth, but it maybe declines to be a little bit more modest.
Great. And you've benefited from a lot of share gain for a number of years now, but recently we've seen new homes gain a lot of share from existing homes, and then within new homes it seems like you've gained a lot of share from maybe smaller and private builders. I'm just wondering if we talk about maybe the first part of that, new homes taking share from existing homes. Can you talk a little bit about that dynamic? And we're often asked if we see a decline in rates, could you see some unlocking of resale inventories? How do you think about that dynamic potentially?
Yeah, I think certainly there has been a very light level of inventory across the country. We see two months or below in terms of months of supply of resale inventory on the market today, which makes our offering very attractive. Being a large spec builder, and we typically compete for that resale buyer as much as we compete against our peers and competitors because we are heavily on the spec side. So if we see rates go down, then we think that does unlock some of that inventory, but to come from the low that it is to a more normalized inventory rate is a place that through the life of our company we've been comfortable competing.
I mean, can you remember a time in your career where we've seen this dynamic of locked-up inventories? And to the extent that some of that resale inventory does come to the market, I mean, does that maybe create a sale in the sense that somebody's selling, but somebody has to buy a home?
Yeah, I think that they're moving into something, right? So they're coming to market, they're making the decision to finally put that house on the market comfortable with the rates, but they've got a housing need somewhere. So again, it's going to create more options for them to choose from, but we still feel good about our positioning against the resale market across our footprint.
Yeah. And in terms of the share gain against maybe smaller builders, private builders, it seems like there's maybe a few drivers of that. Can you talk about what has driven that for you in the last?
Yeah, I think that for us, certainly share gains have occurred in our core markets and the markets where we already got large share, but as much as that, we've grown our count of operating markets from about 102 two years ago to 118 today. And so as we've gone there, we've entered into some of those secondary markets with much less competition from the public builders. And so that share that we've gained in those markets certainly has come from small privates and small regional builders in those markets especially. And I think across the footprint, we've seen more of those gains come from the smaller builders.
I think outside of that, what we had to have to begin with outside of what some of the smaller builders have is the lot position, right? There's still no excess supply of finished lots out in the market today, and we've got the strongest lot position in the industry and just the balance sheet because the capital availability to smaller privates is still relatively tight.
Right. And the impact of the pandemic on smaller builders? I don't know if you can think about sort of before and after from the perspective of a smaller builder.
That's hard to say. Certainly during the pandemic, we saw a lot of people take a pause on positioning of their companies and lot acquisition and lot purchases. Although we took a pause, it didn't take long to step back into the market. So we saw opportunities coming out of when we saw clarity that the pandemic was going to drive some demand to take some lot positions that may have been available for other smaller builders in those markets.
Can you talk a little bit more about your land position in terms of years of owned versus years of optioned, maybe what an optimal level is land availability?
Sure. So we're about 75% optioned today, 25% owned. The owned represents roughly a one and a half years' supply of lots depending on what period you're using to calculate it. We feel very comfortable with that position, happy with our operators having driven it as high as they did. I think the even more important number that hasn't gotten talked about a whole lot builder by builder is just in terms of the actual homes we're closing, how many of those lots were developed by a third party because options can have more than one component, right? We put every piece of dirt we purchase under option, whether it's raw land we're going to self-develop or if it's going to be a third-party developed lot that we're going to buy finished.
In terms of our fiscal 2023 home closings, 65% of the homes that we closed were on a lot developed by a third party. I think there is room for that to continue to drift higher, kind of irrespective of where the 75 ultimately goes. That's what's continuing to drive very, very strong returns for us is doing more and more with third-party developers. We feel very comfortable with our position and the relationships that we've built in that regard.
We were talking earlier about Forestar. Can you remind us of your ownership stake in Forestar, their role in terms of supplying land and?
Yeah, I mean, it takes everybody. There's still not a lot of financing out there to third-party developers. They're very capital-constrained and generally most are local in nature. A few of ours are regional, but most are local relationships. So Forestar has been key. We have about a 63% ownership stake in Forestar today, and they've been delivering us roughly 15% of the lots on homes that we've recently started. So they definitely have the ability to continue to consolidate share just within D.R. Horton, but also what they do outside of D.R. Horton in terms of scaling up their business, and we're really excited to continue to build out their people and their platform.
From a land cost perspective, can you talk about land price trends and any reason to think that those could improve or deteriorate or?
Yeah, we certainly have seen land be very sticky as we may see other components of our cost move up and down. Land is taking longer to entitle, becoming a little more scarce in the larger metropolitan areas. And so the land itself has remained sticky and price continued to escalate, and the development costs have climbed as well. Not just the development costs and materials, but also the time to put those lots on the ground, which again has created more scarcity of lots, which in a scarce environment, we don't expect to see land reduce either from a land base or a development cost basis short of a drop in demand.
Got it. We talked earlier about share gain, and can you talk from a big picture perspective about the spec model versus build-to-order? Some of your build-to-order peers are maybe leaning more into spec. Can you talk about that strategy and approach and how you kind of see it over the cycle?
Yeah, I think that for us, we find a high level of efficiency in being a spec builder. As we scale and gain local scale as well as national scale, being a little more thoughtful and targeted in terms of what goes into our homes gives us increased purchasing power. As we enter new markets, it's very targeted, and so it allows us to greenfield or enter the new markets with a narrow scope of what it is we're going to build. For the most part, that's targeted towards the first-time first move-up buyer. We feel pretty good about being able to meet what they need and doing it in a spec environment. But really what it gives us the ability to do is position against the resale market. Any given market has 5-6 times resales compared to a new home.
So it opens up that market to us when we have those inventory homes available for immediate or near-term move-in.
And given resale inventory is so constricted and some builders have really leaned in the spec, is there any risk maybe in any MSA that you operate in that you're seeing maybe excess spec inventory? Or how do you think about that risk from an industry perspective?
Yeah, we haven't really seen that build-up yet in any of the MSAs that we operate in. There certainly is that risk, but I think that an industry as a whole, the challenge we have is having a lot of supply in front of us to truly oversupply the market. And I believe that we as well as the other builders in the industry operate today with a higher level of discipline than we may have a decade ago, and I think that that's going to help keep some guardrails on supply in the market. It takes a lot to be a spec builder and to understand that and be willing to continue to put the homes out there as the market ebbs and flows. And so I think we'll see constraint in the market that keeps it from being oversupplied.
Can you talk a little bit more about underwriting criteria in terms of your return criteria for new communities and?
Yeah, I mean, we continue. We really haven't changed our underwriting. When you look at the last couple of years, I mean, we continue to look towards a 24-month cashback and a minimum of a 20% return. That's going to scale up based on risk profile, whether it's raw land compared to developed lot that we're purchasing. But we continue to look closely at all of those deals and communities that we're underwriting in the marketplace.
Similar question maybe on gross margin profiles. Your gross margins are pretty meaningfully above where they were pre-pandemic. They've come down a little bit. What do you think in terms of sustainable through-cycle margin or is maybe the return piece more important?
Return piece definitely more important. Always lead with that. There's going to continue to be a lot of variability in gross margin because I think Horton, more than any other builder, we're going to meet the market first because of our spec model, and we're going to adjust to whatever interest rate environment we find ourselves in and manage to maximizing returns in each of our individual communities versus a gross margin. That being said, I mean, I think we do believe that there should be some scale advantages today in the business with as large as we've gotten compared to how we historically been. Paul already mentioned both locally and nationally, right? So locally labor, we're the largest builder and we're the most consistent builder from a starts pace. We should be getting better pricing on our labor.
And then nationally, where we can enter into contracts with providers to supply materials to us on a national basis, we should have more purchasing power than anyone else, especially when you take our Forestar plus what we're doing on the rental side and scaling even more so in that regard. And then the other sustainable advantage we have in our cost structure today is just our lower cost of capital from both deleveraging and then just generally what we have on the balance sheet today is at a lower interest rate than history. So what we're costing off on a per-home closed basis in terms of interest is not only lower than what we've been at historically, it's also lower than I think any other builder out there today outside of, say, maybe NVR.
So hard to say where that lands us, but you could say we just lived through a pretty big disruption with rates going from 2% to 3% to 7+% over a period of time, and we're still right around a 23% gross margin. So it feels like outside of big peaks and valleys, we're going to once again maximize returns and do whatever that takes, and that there should be a couple hundred basis points compared to history.
Right. And I guess there's a couple pieces there. I mean, one of the big themes at this conference and talking to CEOs is around innovation. And when we think about homebuilding and the housing market, you have millions of participants, sellers and buyers that are very, very fragmented, and maybe there's nobody big enough to kind of drive innovation. You guys have obviously gained a huge amount of share. You're the largest U.S. builder. When you think about innovation and improving the way that you build homes and sell homes, I'm just curious if there's a few things that you'd highlight in the way that you go to market and the way that you build your homes that are maybe different than what was done 10 years ago or.
Yeah, I think more than a broad-scale innovative change in how we do it, it's the consistency and rhythm in which we do it, right? And continuing to simplify and create an efficient process in our business. I think that as you look at the next couple of years, and we've seen technology from a sales perspective be a bigger part of our business and focused on our digital marketing and our online sales presence, and we'll see what happens with disruption and with the realtor community and what's going on today. Still been a huge focus for us. Realtors are very much a part of our business. We'll still be very much a part of our business on a go-forward basis. But I do think we'll see some shifts there and technology will play some part in how we sell homes on a go-forward basis.
But it still is very much a personal decision, and it's the biggest purchase in many people's lives. And so that face-to-face experience, I don't think, goes away.
Yeah. And on the manufacturing side, I mean, some of your competitors have off-site manufacturing or people talk about 3D printing and Lego blocks. What's your view on that?
Yeah, we spend a lot of time looking at a lot of that, and we have some strategic investments in some companies that are experimenting and cutting edge or front edge of that. It still runs to the challenge of getting all of those products to site, right? The house is built in place. And eventually, someone's going to break through some of those. I think over time to break through its scale and the scale that we have and the deployment of that scale is going to take a while. But we continue to watch a lot of those technologies, stay engaged in them, involved in them so that we can kind of watch as they shift. For us, it's a matter of can we take that innovation and truly scale it across our platform and across our footprint?
When we can do that, that's when we start to get excited about it.
Great. Great. I don't know if there's any questions from the audience. We talked about land costs and your ability and your sort of leverage on the land side. I'm wondering if we could maybe do the same for building products and stick-and-brick costs, and if you could characterize maybe sort of stick-and-brick cost environment going into the spring, and then maybe from a bigger picture perspective, some of the advantages that you have versus peers.
Sure. I think the biggest positive right now is things aren't inflating at the same rate, right? When the supply chain was very difficult, we saw pretty significant cost inflation on the materials side. Several years before that, it would have been more labor-related. They're both much more modest today. But I think with the inflationary environment we find ourselves in and still a relatively good jobs market, we wouldn't expect labor costs to go backwards at this point. So I do think we believe we have a benefit across the industry because of our consistency of starts and our scale at the local level. But we would expect some continued modest cost inflation on the labor side. And then on the materials side, hopefully, it's a little bit more muted.
We still have plenty of categories where costs are going up, but we are having some success in other categories to offset some of that.
Can you remind us where your cycle times are versus pre-pandemic?
Yeah, we're back to normal, which is pretty exciting considering where we had gotten to. I think we topped out at over seven months of a build time on homes that we'd closed in a quarter. This most recent quarter, we were back down to roughly four months, which is pretty much right in line with our historical norm.
Can you talk a little bit about strategy on SFR and multifamily rental? In this kind of rate environment, if that's changed or the sort of market conditions that you're seeing?
We still feel good about the platform and our ability to scale if the market gives it to us. No question that in the current interest rate environment and the cap rate environment, we aren't seeing the returns that we had hoped to see as we look at the near term, but do believe that we have seen strong demand still from institutional buyers. We may not agree on valuations sometimes, but they're still out there looking to fill a pipeline and an interest in being in that space. We feel we're better suited than anyone to supply at scale that type of product. And so we're going to stay active in the product, watch it closely as we look at the near term, and the market will tell us how far to lean into that. But feel good about our positioning. We're learning a lot about that business.
On the apartment side, we've continued to scale. When we look at our footprint across the market, we have a lot of opportunity to continue to stay active in the multifamily market without oversupplying any one area. We're not going to risk the balance sheet or risk our core business on the for-sale side to lean into that, but we'll let the market tell us where to take it.
Great. Can you talk a little bit about optimal leverage for the business and then capital allocation? I think you guided to $3 billion of operating cash for the year. Uses of cash, buyback, dividend.
Sure. We haven't really changed our philosophy. It's just as we've generated more cash, it's opened up more opportunity for us to do a little bit more of all of our priorities. So I think our go-forward plan is more of the same in terms of taking a balanced capital allocation approach. And as we generate more cash, it allows us to do a little bit more of all of it. So we're consistently going to reinvest in the business. We want to be here. We want to grow the business. We want to continue to consolidate share, which you've already heard both of us say multiple times. We're going to continue to look at M&A, but really nothing large-scale of note. I mean, we're very interested in just continuing to do more of the smaller tuck-in type opportunities that we've found previously, and those can come all at once.
We may have several years where we don't do anything. It's really hard to say when that's going to happen. We're going to continue to maintain conservative leverage. To your question, what's optimal? A lot of people talk to us about net cash positions, and we really focus on our gross leverage because our cash balances do adjust pretty dramatically intra-quarter and throughout the year because we continue to close more of our homes at the end of a quarter and at the end of a fiscal year than at other points in time. We're working to get better on that, but right now, that is what it is. What you see for a cash balance for us at our reported period ends is actually the highest cash we run throughout the year.
In terms of optimal leverage, we've really talked about, call it 20% or so gross leverage. Then on a net debt basis, we are in the single digits, if not closer to zero in a lot of cases. But we feel that's very prudent and it's given us a lot of flexibility in how to manage through market conditions. As Paul had mentioned in the early days of COVID, I mean, there were a lot of builders that had to make a lot of choices and even let people go very quickly. We really just paused and took a wait-and-see approach, which in hindsight, we didn't know, but it turned out very well because, as everyone in this room probably recalls, housing recovered very sharply and much quicker than I think people would have anticipated.
Having that modest leverage and strong balance sheet is really key to us navigating market conditions that we're just not going to be in control of. Going back to just capital allocation in general, we are going to continue to reinvest in the rental business, which Paul just touched on. In terms of return of cash to shareholders, we've got a dividend right now that's approximately $400 million a year. The board's been increasing that each year as our profits have been strong and our cash flows have been good. We've been increasing our share repurchase on an absolute dollar amount each year for the last several years and have committed to reducing our outstanding share count by a low single-digit percentage year in and year out.
This year, we've said we're going to repurchase $1.3 billion shares, which $1.3 billion of shares, which will be the largest amount we've done in a fiscal year to date.
Two questions on footprint. You did do a couple bolt-ons, I guess, with Truland and Riggins. What capabilities did that bring to D.R. Horton? And then from a footprint perspective, maybe related question, I think you're in 33 states. I mean, are there any markets still that you feel like you'd like to enter and maybe how you think about sort of greenfield versus M&A or how you've approached that over the last year?
Yeah. To the acquisitions of Truland and Riggins, both gave us a solid lot supply in the markets they operated in and good local knowledge. With Truland along the Alabama and Florida coast, we already had a long relationship with Nathan Cox as a land developer for us. He also had a homebuilding business of which he determined it's better for us to be the homebuilder and him to be the lot developer. And similarly with Riggins. Riggins brought a great platform in a market that we had had a couple of communities, and so it gave us a bigger footprint in Northwest Arkansas and still stay engaged with them out ahead of us as a land acquisition and development partner for us. As we look towards new markets, we're in 45 of the top 50 housing markets in the country.
We don't necessarily need to be in all of them, but we look towards some of those markets: Kansas City, St. Louis, Boise, are a few that come to mind when the time is right. We feel that we want to be there. A lot of that comes either through an acquisition of someone local that gives us a good platform and lot supply, but we have become very good at going in greenfield as well. That's relying on people. Very focused as a company on growing our people and positioning our folks to go into these new opportunities so that when we enter in, it's with a team that comes from the Horton side and can execute on a simple business plan that allows us to drive affordable prices inside of those communities.
I guess we recently saw maybe a large acquisition in the homebuilding space. I'm just curious, from your comments, it seems like that's maybe less attractive for Horton. Just curious if you could talk about sort of maybe the obstacles in terms of consolidating or public-to-public type M&A in homebuilding?
Yeah. I think for us, again, for us, acquisition gives us either a lot supply and/or a platform or a culture that mixes well with ours or some combination thereof. When you think about scale of public-to-public, for the most part, those footprints overlap ours, and we have a good operation in the majority of those. And it's a distraction. It can be in terms of growth and opportunity and streamlining your business, trying to integrate. And we've grown a lot through acquisition through the years. We got to be scale and size that we are in our earlier days through a lot of acquisition. That's a lot of work and focus to integrate those business models into yours. So not something we're thinking hard about today, but we continue to track it and watch it all.
Okay. Thanks, guys. Appreciate it. Just go back to the cash flow question. Within the $3 billion homebuilding cash flow from ops, kind of what's the anticipated investment in inventory? And I guess more specifically, as it relates to units under construction, if you achieve that inventory investment that's kind of implied by your cash flow guide, where would you exit the year on inventory units relative to that 42,000 you entered the year?
Probably a 2,000-3,000 higher would be the best guess right now based on market conditions and how the spring goes. But we certainly want to position ourselves into 2025 to grow. And so now that we're back to our normalized cycle times, we'll still need a few more homes in inventory to grow that ±10%, but we don't necessarily need to go step it up significantly higher from where we are today.
Just one quick follow-up. If we do 2.1 times conversion on the units this year, kind of you guys have made a lot of operational improvements. You guys continue to improve the business. Where do you think that can go over time? And is there incremental opportunity to increase that conversion next year?
I think there's incremental opportunity. We've taken a big step from seven months down to four. I think it's going to be a slower grind for us to reduce from 120 days down, but we are focused on it daily. The rest of this year will help give us a better idea of where we need to be positioned from inventory at year-end. If we can see improvement, then we won't need as many homes out there, and that would lead us to a little higher turn. But already guiding to over two this year, which is more along our historical norms. If we can continue to gain and focus on efficiencies, then we'll take advantage of that and keep our inventory down.
Thank you. I guess from your comments, you've de-risked the balance sheet. You've improved returns. You've had very good financial performance and operating performance over a period of a lot of volatility. It seems like the stock still, there's a construct around price to book and impairments and write-downs that we've gone through a pretty volatile period and that really hasn't happened. I'm curious how you think about that. When you talk to investors or from your own thoughts, what does the market need to see to transition to another kind of valuation metric? If you think that earnings or cash flow is more meaningful, or just curious to get your thoughts on that.
Yeah. I think we certainly believe we should be traded differently than we have been just because not only Horton, but the industry by and large has changed and is much more disciplined today and has completely different balance sheets and land ownership structures. But we can sit here and say we'd rather trade off of PE. But if we're stuck to the historical PE multiples that a builder's achieved, I'm not sure we really would take that trade-off. So we're going to continue doing what we're in control of, which is managing to a very strong balance sheet and consolidating share and generating strong profits, returns, and cash flows and grow our book value year in and year out. I think we feel very comfortable with what we've done with our balance sheet.
We should never experience what we did through the financial crisis again when we did have to write off a bunch of equity and erode book. So as long as we keep doing what we're in control of and keep telling the story best we can, I think over time, it's going to show I think it already has, but it'll continue to show even more so how the industry truly has changed and should be positioned for a rerating because even though we believe we're further along in terms of conservative balance sheet and land ownership in terms of shifting it more off balance sheet, the whole industry is very different today and much more disciplined. We shouldn't have to go through what we went through last time. I don't know if you would add anything to that.
No. I think you've.
Is there the land available to overbuild in the way that we overbuilt in 2006 and the labor?
We don't see it. It is getting harder and harder to put a lot on the ground. And from a government entitlement and approval standpoint, from an availability at locations that people feel comfortable being, I just think there's a lot of guardrails on the ability to bring the lot to market. Without the lot, we cannot build a home. And aside from that, I think just the discipline in the industry, not just ourselves, but across the board of being more mindful of our balance sheets, understanding what that means to own all that land and what it does for us. So I do think it's hard to bring housing to the market today. We do think it's undersupplied, and it's hard to see an opportunity for us to go out and oversupply if just left to our own devices to just go crazy.
Yeah. Yeah. And Paul, you were named CEO in October. And obviously, you've been with the company for a number of years, and Horton's been extremely successful. If you could talk about your priorities for the company, maybe a little bit about your history with the company and what you think's important going forward.
You're getting to see his first fireside chat.
Yeah. So although I'm new in this role, I'm in my 25th year. So not new to the company. I think when you look at the company in terms of priorities, we are in the right spot. We are going to continue to consolidate market share as we have been and where it makes sense. And we believe that's everywhere where we operate. We're going to continue to focus on driving consistent returns. We want to consolidate market share, but not at the expense of those returns and position our balance sheet because we are in a good place. And for us, it's a matter of continuing to perform through these kind of cycles. And I think to that rerating question or how should we be trading, I think that that starts to prove out by us just out there doing it instead of talking about doing it.
I think that as a company, this is about having the people available to manage our growth and to do that. And so that's certainly something that we, not just me, but we as an executive team, have focused on. And the last couple of years, I'm going to continue to focus on in a big way because that's our ability to continue to grow in the markets that we've spread out to. And we'll take advantage and opportunity in markets that we want to be in, but not until we have the right people in place to go execute.
I guess just implicitly, as you think about a cycle view and Horton's ability to kind of grow over the cycle and you deploy capital to land and try to grow, where do you think we are in the housing cycle as you take over the company?
That's a tough one. And I don't know that the cycles look like they used to. And part of that is from a supply base. Forget the limited supply on the resale market. Our ability to put homes on the grounds we've already spoken to is harder today than it was in the past. There are fewer players in the market. We don't have as much of the local privates and the lot developers in front of them to continue to supply the market. I still think that the housing market is undersupplied. And we are in a great position as a company to be able to continue to supply and scale that business where it's needed.
Great. Great. Any questions from anything else? Great. Well, I think we're coming up on time. So Paul, Jessica, thank you so much.
Thank you very much.
Thank you.
Thank y'all.