Brian Chambers: Yes. Joe, let me maybe talk a little bit about Q4, Q1 volumes because you’re right, they’ve held up very strong. Demand for our products have been strong. And this is where we’ve seen, I think, starting last year, demand for our products being more driven on completion rates than on starts. So we saw that kind of emerge back half of 2021 coming into 2022 that even as starts grew, when you look at completion rates, they seem to top out at around 1.4 million units and really driven by what we believe are constraints in labor availability, material availability. And so while starts continued to grow, completion rates didn’t and that has created a backlog and elongated the construction cycle. So in the back half of last year, even though we saw starts coming down, they were still above completion rates and therefore, still building the backlog.
And I think what we’ve seen in Q4, that finally kind of evened out. We saw November, December starts kind of roughly in line with completion rates, about 1.4 million units. And that’s what’s driven great strength to finish the year in our residential business, great strength to start the year. Now, we do expect that starts continue to trend down and they start falling below those completion rates, that this backlog is going to get worked through. And I think regionally, I would say we’re — we would expect some of that to work through as early as the end of the first quarter. Some markets might be continuation into the second quarter. But clearly, if starts continue to come down below that 1.4 million rate, we think that’s going to start to impact future demand.
When we look at how much that’s going to depend on, I think, where starts kind of bottom out, as you said, relative to where they’re running today, one key element we’ve talked about in the past are mortgage rates. And we continue to believe that consumers are resetting the higher mortgage rates. They continue to kind of sit on the sidelines in terms of wanting to get into the market. But once we see rates stabilize, we think that consumers will reset. They’re going to come into the market. So we think any kind of slowdown should be shorter in duration given that there’s a high demand for housing. We’ve been underbuilt for so many years. There is very little inventory to no inventory in the channel to work through. Demographics and household formations still require housing.
So we think the depth and duration of any slowdown is going to be more shallow than previous cycles and shorter. And I think once we start seeing interest rates stabilize, we’re going to see people coming back into the market pretty quickly. We saw a glimmer of that here in January when interest rates, even when they kind of hovered around that 6%, a little above 6%, we’ve seen a lot more positive comments from builders and some more foot traffic in looking at homes. So we hope that, that’s going to play out, interest rates stabilize and any kind of a slowdown would be shorter and shallower. So it might get a little choppy for the next couple of quarters. But long term, we feel very good about the fundamentals of the business.
Operator: Our next question comes from Truman Patterson of Wolfe Research.
Trevor Allinson: This is Trevor Allinson on for Truman. Can you talk about how you’re thinking about roofing industry volumes and pricing for the full year 2023? Appreciating you’re not giving full year ’23 guidance but just looking at where housing starts are or existing home sales are, where we expect there to be some softness. But you’re guiding shipments being down high single digits in 1Q and ARMA comps become progressively easier throughout the year. So just curious if you’re thinking maybe 1Q represents the bottom on a year-over-year basis and maybe how you’re thinking about industry volumes for the full year.
