8.	Capitalization of Interest

We capitalize interest to inventories during the period of development in accordance with ASC 835, Interest (“ASC 835”). Homebuilding interest capitalized as a cost of inventories is included in cost of sales as related units or lots are sold. To the extent our homebuilding debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred by us. 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. The homebuilding interest expensed in the table below relates to the portion of homebuilding debt which exceeded inventories that were deemed unqualified assets in accordance with ASC 835.


	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2013			2012			2013			2012
	(Dollars in thousands)
Homebuilding interest incurred	$	15,345		$	10,573		$	29,684		$	21,166
Less: Interest capitalized		(14,436	)		(10,573	)		(27,958	)		(20,358	)

Homebuilding interest expense	$	909		$	—		$	1,726		$	808


Interest capitalized, beginning of period	$	72,791		$	63,633		$	69,143		$	58,742
Interest capitalized during period		14,436			10,573			27,958			20,358
Less: Previously capitalized interest included in home cost of sales		(12,680	)		(7,105	)		(22,554	)		(11,999	)

Interest capitalized, end of period	$	74,547		$	67,101		$	74,547		$	67,101