Operator: And one moment for our next question. Our next question will be coming from Camden Roberts of University of South Carolina. Camden, your line is open.
Camden Roberts: Hey, guys. Thank you for the great earnings call. I’m calling from South Carolina. We were actually just at the hamlet factory in North Carolina, and we had a great tour. And I just wanted to ask you what are you — what should we be looking at in 2024? Are you optimistic about Anthem and those duplex sales? I’m sure there’s a lot of pent-up demand for that? Or should we be looking more at the recent Solitaire acquisition. What are you most optimistic about? And what should we be focusing on 2024?
Bill Boor : It’s a big question. Glad it’s great to hear you were at Hamlet. We thought that was a good tour. We’re pretty proud of that new plant and how it’s come up, and we think it’s targeted at the right point in the market for what’s going on from an industry dynamic perspective. They’re making kind of at the lower price point product, and they’ve really come up very quickly as far as most excited. I mean we talked about Anthem. We think that’s — I think that’s going to be a good business for us. I also to be honest, I also think that from a broader perspective, those are the kind of solutions that can move the ball forward on affordability. So I’m really excited about the potential of the industry taking advantage of those changes in the HUD code to get better solutions for affordability.
You touched on Solitaire. We’ve had a year now with Solitaire. We’re excited about that acquisition. We told folks when we announced that acquisition that we bought some really good plants and they’ve got a great brand in the market that’s kind of in a particular niche. And we think that’s going to — where acquisition is going to be a great one for us. Overall, again, you asked a broad question, I could probably talk all that. Overall, I’m excited to see the industry start picking up as community orders start to pick up. The dealer channel has been — has gotten back on its feet, and I think it’s doing pretty well. You could almost look at the difference in the peak HUD sales for this industry compared to the most recent seasonally adjusted level in December based on high shipments, and it pretty much can be explained by the drop-off in community orders this past year.
So I think as we — as the year unfolds, I’m not able to make predictions about it, but as the year unfolds and we see communities get their inventory behind them and start resuming their orders. I think it’s a lot of good positive upside for the industry.
Camden Roberts: Thank you, Bill. I mean I know it is open-ended. I mean there’s a lot to be excited about. So I just wanted to know what were pointed down, but those three of the community sales does sound exciting. So thank you very much.
Bill Boor : All right. Thank you.
Operator: [Operator Instructions] our next question will be a follow-up from Daniel Moore of CJS Securities. Daniel, your line is open.
Daniel Moore : Thanks, again. I just wanted a quick question or two on kind of update on financing and availability. So any meaningful change in spreads over the last 90-plus days, both for chattel as well as land home versus traditional stick-built mortgage rates? And how would you describe the lending environment today relative to a year ago? Now you’re seeing more community banks exit stable or others backfilling? Any kind of color you might give there would be helpful. Thank you.
Mark Fusler : Yeah. So I’ll start with the rates, Dan. So the rates for just home-only loans quoted rates are in the high 8%, low 9% range still, and that’s been pretty consistent these past 90 days.
Bill Boor : Picking up on your question that I hope I rephrased it accurately kind of the investors in MH loans, for example, community banks and like regional banks and credit union pipe investors can be finicky. And I’ll tell you that I don’t want this to be alarmist at all because it shouldn’t be, but they’ve tightened up a little bit. But I think we’ll work through that. I don’t think it’s a major issue from the perspective of lending availability to the consumers. And why I say that is there are a lot of folks in that market and they’re not all heavily dependent on those outlets or those final investors. And one thing we’ve talked about over the past losing track of time, but it’s been a while is that for a while, GSE loans, the conforming loans had really kind of gone out of the market.
And basically, what happened is GSEs raised their requirements, raise their terms and interest rates and the investors we’re talking about like the regional banks, credit union type investors really didn’t respond as quickly. I think that’s because they had a lot of capital put in place. Now what we’re seeing is that the regional — I call them the non-conforming investors have increased their requirements. But what happens is GSEs become more competitive in the market, and we’ll probably see a swing back to that that final funding source for the loans. As usual, I think I’m giving a long answer to a short question, but we’re not — we’ll watch those dynamics, but we are not really seeing anything that gives us concern about the end consumers’ access to reasonably priced loans.
Daniel Moore : No, that’s good color. I appreciate it. I’m going to ask one more and maybe it’s a variation on a prior question, maybe not let you judge. But at this stage, we’re stable — pretty stable at 60% capacity utilization, plus or minus would you be looking to add capacity when you think about the opportunity set and the lack of for availability in terms of affordable homes over the next two, three, five years? Or are we more let’s kind of stick where we are wait and see and see how the demand builds over the coming quarters. Thanks, again.
Bill Boor : Yeah. That’s a really good question, actually. I guess I would say it’s the latter or it’s the former. I haven’t restated. I would not — I don’t think Cavco would hesitate to add capacity in this industry given what we see strategically. And when you look at a strategic time frame, which I define as three-plus years, it takes time to put capacity in place. This country has — depending on your favorite economist, 6 million housing unit deficit to be filled. And so strategically, we look right through the many cycles like the one we’re operating in right now, and we know that there’s an opportunity to continue doing more to bring down to increase the availability of affordable housing.
Daniel Moore : Very helpful. Thanks, again. Look forward, to catching up soon.
Bill Boor : Thanks, Dan.
Allison Aden : Thanks, Dan.
Operator: I would now like to turn the conference back to Bill for closing remarks.
Bill Boor : Okay. Thank you. I mentioned Louisville show in my opening comments. We showcased 15 homes from 9 Cavco plants at the show. We also had our lending company, CountryPlace Mortgage there. They were there to talk to customers about how we can meet their commercial and consumer lending needs. So it was a great effort to try to get out there and show what we can do from a partnership perspective. I want to take a quick moment to thank everyone at Cavco, who has been involved in our development and launch of the Anthem Duplex line and in all that went into the Louisville show from the folks who are designing and building these homes to the marketing and sales teams, the commitment teamwork have really been outstanding.
At both events, it was great to see the strength of our organization coming to the forefront. Our drive during this downturn has been to keep focused on getting better in every way, so we’re ready to run when the inevitable market upswing occurs. And I’m very confident we’re doing just that. So I want to thank you, as always, for your interest in Cavco. And we look forward to keeping you updated on our progress.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
