Paul Przybylski

Paul Przybylski inquired about the monthly cadence of Tri Pointe Homes' orders and incentives throughout the quarter, and whether there's a floor on sales pace that would trigger increased incentives.

Answer

Glenn Keeler, CFO, indicated that the monthly order cadence and incentives were consistent, with September slightly outperforming August, and incentives on deliveries at 8.2%. Doug Bauer, CEO, acknowledged the challenging market with absorptions around 2 to 2.5, emphasizing a focus on strong community count growth for 2026 rather than setting an absolute floor for sales pace with incentives.

Paul Przybylski inquired about the monthly cadence of orders and incentives during the third quarter, and whether there's an absolute floor for sales pace that would trigger increased incentives.

Answer

CFO Glenn Keeler stated that the monthly cadence for orders and incentives was consistent throughout the quarter, with September slightly outperforming August, and incentives on deliveries at 8.2%. CEO Doug Bauer noted the industry is currently experiencing a sales pace between 2 and 2.5 absorptions, emphasizing a focus on strong community count growth for 2026 rather than setting an absolute floor for sales pace.

Paul Przybylski inquired about the drivers behind the sequential increase in average sales price for orders, asking if it was due to mix or pricing power. He also asked about the potential impact of tariffs, political uncertainty in the Mid-Atlantic, and insurance issues in California on the business.

Answer

CEO Douglas Bauer and CFO Glenn Keeler clarified that the ASP increase was due to mix. Bauer noted that pricing power varies by submarket from 1% to 5%. Regarding external factors, he stated there has been no negative business impact in the D.C. Metro area and that the company is managing California insurance issues for entry-level buyers through its Tri Pointe Assurance program and targeted incentives.

Paul Przybylski from Wolfe Research asked for an update on the M&A environment, any changes to land underwriting standards, and trends in land financing costs.

Answer

EVP and CFO Russell Devendorf stated that while M&A opportunities exist, the company is comfortable with its proven greenfield model, which preserves culture and utilizes internal talent. President and CEO Gregory Bennett added that there have been no significant changes to overall underwriting standards or land financing terms, with the company remaining conservative and focused on maintaining pace.

Paul Przybylski of Wolfe Research, LLC asked about the elasticity of incentives across different consumer segments and requested color on incentive levels for each segment relative to the 8.7% average. He also inquired about any order impact from the FHA eligibility change for non-resident buyers.

Answer

President & CEO Ryan Marshall noted there is actually price inelasticity, meaning that higher incentives do not necessarily drive justifiable incremental volume. He explained that incentives are used across all buyer groups but differ in form: rate buydowns for first-time buyers, and price discounts or option incentives for move-up and active adult buyers. EVP & CFO James Ossowski stated that the FHA rule change had no real impact as it affects a very small portion of their business.

Paul Przybylski asked for color on demand changes in Texas and Florida markets, as well as the company's perspective on M&A and the Indianapolis integration.

Answer

Sheryl Palmer, Chairman and CEO, detailed market performance, noting Florida's year-over-year strength led by Orlando and the Esplanade brand. In Texas, she highlighted Austin's recovery, Dallas's high-margin growth, and Houston's successful repositioning. Erik Heuser, Chief Corporate Operations Officer, added that resale inventory in Florida had improved. Regarding M&A, Palmer noted an increase in deal flow from smaller privates but said valuation expectations have not fully recalibrated. She confirmed the Indianapolis integration is largely complete and performing well.

Paul Przybylski, on behalf of Trevor Young, inquired about the specific contributions of the slower Repair & Remodel (R&R) market versus builder inventory reductions to the company's reduced guidance. He also asked if the company has seen any positive business impact from recent hurricanes or wildfires.

Answer

Executive M. Culbreth confirmed that both softer R&R demand and new construction inventory reductions were key drivers of the quarterly performance and the revised full-year outlook, expecting a similar environment in Q4. Culbreth added that while there were some positive, non-material impacts in Florida from hurricanes, there was no specific impact observed from the fires in Southern California.