From LGIH Conference Call

The primary reason that our closings are down year-over-year as that we had strong closings in December 2016 and our inventory of completed homes (available to sell) during Q1 was not as high as we would have liked.

We entered 2016 with 1560 homes at various stages compared to 1710 homes at the end of 2015 giving us fewer homes to close in the first quarter. We believe the situation will correct itself in the next few months as we are bringing new inventory online with additional homes under construction and the completion of new development sections.

As we continue to build back our inventory, we are continuing to sell homes. Sales over the last 90 days have been very strong. We have had over 500 net sales in each of the month of February, March and April. We currently have more homes under contract than we have had at any one time in our company history.

We expect our inventory levels to increase in May, trending back to targeted levels over the second quarter and in line with our strong sale performance. Based on our backlog, we expect to close between 450 and 500 homes in the month of May, resulting in an absorption pace north of six closings, perking(?) in the current month and right on track to meet our goal of closing more than 4700 homes for the year….

[Why they want to have more home inventory]…Our business model is converting renters into home owners. And ideally we have the house finished so the customer can look at it and we can close in the next 30 to 45 days. And the longer that it gets extended, there will be more deals that cancels. But like I said, I don’t think that’s going to be a material amount.