14. Interest Activity

The Company capitalizes interest on its senior notes associated with its qualifying assets, which includes land and land under development that is actively being developed and homes under construction through the completion of construction. When construction of a home is complete, such home is no longer considered to be a qualifying asset and interest is no longer capitalized on that home.

Interest activity is shown below (in thousands).


	Year Ended December 31,
	2011			2010			2009
Total Interest Incurred
Corporate	$	62,136		$	72,076		$	57,941
Financial Services and Other		442			466			451

Total interest incurred	$	62,578		$	72,542		$	58,392

Total Interest Capitalized
Interest capitalized, beginning of year	$	38,446		$	28,339		$	39,239
Interest capitalized during the year		41,448			33,919			19,810
Previously capitalized interest included in home cost of sales		(21,152	)		(23,812	)		(30,710	)

Interest capitalized, end of year	$	58,742		$	38,446		$	28,339