Quarterly report [Sections 13 or 15(d)]

REAL ESTATE AND CAPITALIZED INTEREST

v3.25.3
REAL ESTATE AND CAPITALIZED INTEREST
 9 Months Ended
Sep. 30, 2025
Inventory Disclosure [Abstract]  
REAL ESTATE AND CAPITALIZED INTEREST REAL ESTATE AND CAPITALIZED INTEREST
Real estate consists of the following (in thousands):
As of
September 30, 2025 December 31, 2024
Homes completed and under construction (1)
$ 2,341,730  $ 2,375,639 
Finished home sites and home sites under development (2)
3,798,957  3,353,136 
Total $ 6,140,687  $ 5,728,775 

(1)Includes the allocated land and land development costs associated with each lot for sold and unsold homes.
(2)Includes raw land, land held for development, land held for sale and communities in mothball status, less impairments, if any. Land held for development, land held for sale and communities in mothball status totaled $118.5 million and $62.7 million as of September 30, 2025 and December 31, 2024, respectively. We do not capitalize interest for these inactive assets, and all ongoing costs of land ownership (i.e. property taxes, homeowner association dues, etc.) are expensed as incurred.
Subject to sufficient qualifying assets, we capitalize our development period interest costs incurred to applicable qualifying assets in connection with our real estate development and construction activities. Capitalized interest is allocated to active Real estate when incurred and charged to Cost of closings when the related property is delivered. A summary of our capitalized interest is as follows (in thousands):
  Three Months Ended September 30, Nine Months Ended September 30,
  2025 2024 2025 2024
Capitalized interest, beginning of period $ 63,814  $ 54,327  $ 53,678  $ 54,516 
Interest incurred 20,050  12,752  54,759  40,004 
Interest expensed —  —  —  — 
Interest amortized to cost of home and land closings (12,663) (13,348) (37,236) (40,789)
Capitalized interest, end of period $ 71,201  $ 53,731  $ 71,201  $ 53,731 
As discussed in Note 1, and in accordance with ASC 360-10, all of our land inventory and related real estate assets are periodically reviewed for recoverability when certain criteria are met, but at least annually, as our inventory is considered “long-lived” in accordance with GAAP. Due to the current economic environment, we evaluated our Real estate assets during the three months ended September 30, 2025. Based on these reviews, we recorded the following impairment charges during the three and nine months ended September 30, 2025 (in thousands). There were no impairment charges recorded during the three and nine months ended September 30, 2024.
Three Months Ended September 30, Nine Months Ended September 30,
  2025 2025
Real estate inventory impairments:
West $ 543  $ 543 
Central 1,243  1,243 
East $ 6,907  $ 6,907 
Total $ 8,693  $ 8,693 
Impairments of land held for sale:
West —  $ — 
Central —  — 
East 599  $ 599 
Total $ 599  $ 599 
Total impairments:
West 543  543 
Central 1,243  1,243 
East 7,506  7,506 
Total $ 9,292  $ 9,292 

As discussed in Note 1, non-refundable deposits are expensed to Cost of home closings when a land acquisition is terminated or no longer considered probable. The following tables summarizes the write-offs of non-refundable deposits and associated pre-acquisitions costs for terminated land deals during the periods presented (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Terminated option/purchase contracts and related pre-acquisition costs:
West $ 2,544  $ 976  $ 3,667  $ 2,182 
Central 104  474  663  623 
East $ 3,151  572  $ 7,107  1,126 
Total $ 5,799  $ 2,022  $ 11,437  $ 3,931