Quarterly report [Sections 13 or 15(d)]

REAL ESTATE AND CAPITALIZED INTEREST

v3.26.1
REAL ESTATE AND CAPITALIZED INTEREST
 3 Months Ended
Mar. 31, 2026
Inventory Disclosure [Abstract]  
REAL ESTATE AND CAPITALIZED INTEREST REAL ESTATE AND CAPITALIZED INTEREST
Real estate consists of the following (in thousands):
As of
March 31, 2026 December 31, 2025
Homes completed and under construction (1)
$ 1,933,033  $ 2,069,548 
Finished home sites and home sites under development (2)
3,963,883  3,917,572 
Consolidated real estate not owned (3)
65,159  — 
Total $ 5,962,075  $ 5,987,120 

(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 $190.9 million and $164.4 million as of March 31, 2026 and December 31, 2025, 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.
(3)See Note 3 for additional information on consolidated real estate not owned.
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 March 31,
  2026 2025
Capitalized interest, beginning of period $ 77,064  $ 53,678 
Interest incurred 20,005  14,714 
Interest expensed (587) — 
Interest amortized to cost of home and land closings (12,018) (11,285)
Capitalized interest, end of period $ 84,464  $ 57,107 
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. Based on these reviews, we recorded the following impairment charges during the three months ended March 31, 2026 and 2025 (in thousands).
Three Months Ended March 31, Three Months Ended March 31,
  2026 2025
Real estate inventory impairments:
West $ —  $ — 
Central 1,273  — 
East $ 1,154  $ — 
Total $ 2,427  $ — 
Impairments of land held for sale:
West $ —  $ — 
Central —  — 
East $ —  $ — 
Total $ —  $ — 
Total impairments:
West $ —  $ — 
Central 1,273  — 
East $ 1,154  $ — 
Total $ 2,427  $ — 

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-acquisition costs for terminated land contracts during the periods presented (in thousands):

Three Months Ended March 31,
2026 2025
Terminated option/purchase contracts and related pre-acquisition costs:
West $ 100  $ 562 
Central 342  336 
East 931  535 
Total $ 1,373  $ 1,433