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Kristin Cavallari & Mark Ballas Expect People to Think They're Dating

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Adam Taylor/ABC

Kristin Cavallari and Mark Ballas are both young, newly single and have great chemistry on the dance floor – otherwise known as the perfect recipe for a juicy dating rumor.

“That s––t’s already started,” Ballas, 25, who recently split from American Idol alum Pia Toscano, told PEOPLE on Tuesday of rumblings that he and his Dancing with the Stars partner Cavallari are an item. “She is a sweetheart. We have a lot of fun. We laugh a lot. We’re getting along great.”

Cavallari, 24 – whose engagement to Chicago Bears star Jay Cutler just ended – has no problems with people speculating that she and Ballas have more going on than fancy footwork.

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“I kind of expect [the dating rumors], to be honest,” she says. “But that’s what happens when you put two people together.”

Relationship gossip aside, the dancing duo is excited about what the season holds in the ballroom.

“I’m really proud of her progress,” Ballas says. “We re focusing on the routines and making the best performances for our fans. We’re really grateful to them for voting for us.”

Cavallari, who says next week’s quickstep is “a little challenging,” is relieved because she doesn’t “think it’s going to be any worse than the cha cha.”