Capitalization of Interest

6 Months Ended

Jun. 30, 2022

We capitalize interest to inventories during the period of development in accordance with ASC Topic 835, Interest (“ASC 835”). Homebuilding interest capitalized as a cost of inventories is included in cost of sales during the period that related units or lots are delivered. To the extent our homebuilding debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred. Qualified homebuilding assets consist of all lots and homes, excluding finished unsold homes or finished models, within projects that are actively selling or under development. The table set forth below summarizes homebuilding interest activity. For all periods presented below, our qualified assets exceeded our homebuilding debt and as such, all interest incurred has been capitalized.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

	(Dollars in thousands)
Homebuilding interest incurred	$	17,382	$	17,409	$	34,640	$	34,741
Less: Interest capitalized	(17,382)		(17,409)		(34,640)		(34,741)
Homebuilding interest expensed	$	—	$	—	$	—	$	—

Interest capitalized, beginning of period	$	60,468	$	55,268	$	58,054	$	52,777
Plus: Interest capitalized during period	17,382		17,409		34,640		34,741
Less: Previously capitalized interest included in home cost of sales	(15,681)		(18,326)		(30,525)		(33,167)
Interest capitalized, end of period	$	62,169	$	54,351	$	62,169	$	54,351