Warranty Reserve

3 Months Ended

Mar. 31, 2015

6. Warranty Reserve

Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related home sales revenues are recognized. Amounts accrued, which are included in accrued expenses and other liabilities on the consolidated balance sheets, are based upon historical experience rates. We subsequently assess the adequacy of our warranty accrual on a quarterly basis through an internal model that incorporates historical payment trends and adjust the amounts recorded if necessary. Changes in our warranty accrual for the three months ended March 31, 2015 and 2014 are detailed in the table below (in thousands):



	Three Months Ended
	March 31,
	2015		2014
Beginning balance	$	2,194	$	1,150
Warranty expense provisions		575		268
Payments		(242)		(188)
Ending balance	$	2,527	$	1,230