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 and six months ended June 30, 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 June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Interest capitalized beginning of period	$	31,713	$	24,846	$	28,935	$	21,533
Interest capitalized during period		10,830		6,649		18,564		13,029
Less: capitalized interest in cost of sales		(6,875)		(4,918)		(11,831)		(7,985)
Interest capitalized end of period	$	35,668	$	26,577	$	35,668	$	26,577