9. Interest

Interest is capitalized to inventories while the related communities are being actively developed and until homes are completed. As our qualifying assets exceeded our outstanding debt during the three months ended March 31, 2017 and 2016, we capitalized all interest costs incurred during these periods, except for interest incurred on capital leases of equipment related to our golf course operations.

Our interest costs are as follows (in thousands):


	Three Months Ended March 31,
	2017		2016
Interest capitalized beginning of period	$	28,935	$	21,533
Interest capitalized during period		7,734		6,380
Less: capitalized interest in cost of sales		(4,956)		(3,067)
Interest capitalized end of period	$	31,713	$	24,846