Meritage Homes Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

REAL ESTATE AND CAPITALIZED INTEREST (Tables)

REAL ESTATE AND CAPITALIZED INTEREST (Tables)

12 Months Ended

Dec. 31, 2021

Real estate consists of the following (in thousands):


	At December 31,
	2021		2020
Homes under contract under construction (1)	$	1,039,822	$	873,365
Unsold homes, completed and under construction (1)	484,999		357,861
Model homes (1)	81,049		82,502
Finished home sites and home sites under development (2) (3)	2,128,538		1,464,311
	$	3,734,408	$	2,778,039

(1)Includes the allocated land and land development costs associated with each lot for these homes.

(2)Includes raw land, land held for development and land held for sale, less impairments, if any. Land held for development primarily represents land and land development costs related to land where development activity is not currently underway but is expected to begin in the future. For these parcels, we have chosen not to currently develop certain land holdings as they typically represent a portion or phases of a larger land parcel that we plan to build out over several years. We do not capitalize interest for inactive assets, and all ongoing costs of land ownership (i.e. property taxes, homeowner association dues, etc.) are expensed as incurred.

(3)Includes land held for sale of $62.1 million and $72.7 million as of December 31, 2021 and 2020, respectively.

Summary of Capitalized Interest

A summary of our capitalized interest is as follows (in thousands):


	Years Ended December 31,
	2021		2020		2019
Capitalized interest, beginning of year	$	58,940	$	82,014	$	88,454
Interest incurred	62,836		66,289		83,856
Interest expensed	(318)		(2,177)		(8,370)
Interest amortized to cost of home and land closings	(65,205)		(87,186)		(81,926)
Capitalized interest, end of year (1)	$	56,253	$	58,940	$	82,014

(1)Approximately $208,000, $217,000 and $279,000 of the capitalized interest is related to our joint venture investments and is a component of Investments in unconsolidated entities in our consolidated balance sheets as of December 31, 2021, 2020 and 2019, respectively.