Warranties

6 Months Ended

Jun. 30, 2019

Warranties [Abstract]

Warranties

8. Warranties

Estimated future direct warranty costs are accrued and charged to cost of home sales revenues 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. We increased our warranty reserve by $202 thousand during the three months ended June 30, 2019, compared to a $115 thousand decrease during the same period in 2018. We increased our warranty reserve by $224 thousand during the six months ended June 30, 2019, compared to a $160 thousand decrease during the same period in 2018. These adjustments are included in cost of home sales revenues on our condensed consolidated statements of operations. Changes in our warranty accrual are detailed in the table below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Beginning balance	$	8,633	$	8,961	$	7,970	$	8,531
Warranty reserve assumed in business combination		—		397		—		397
Warranty expense provisions		2,107		1,787		3,768		3,221
Payments		(1,174)		(761)		(2,194)		(1,720)
Warranty adjustment		202		(115)		224		(160)
Ending balance	$	9,768	$	10,269	$	9,768	$	10,269