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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2023
Fair Value Disclosures [Abstract] |
Fair Value Measurements | Fair Value Measurements We apply the following methods and assumptions in estimating our fair value measurements: Cash equivalents — The fair value measurement of money market funds is based on quoted market prices in active markets (Level 1). The fair value measurement of other cash equivalents is based on observable market-based inputs principally derived from or corroborated by observable market data (Level 2). Short-term investments — The fair value measurement of our short-term investments is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means (Level 2). Mortgage loans held for sale — The fair value of mortgage loans held for sale is generally calculated by reference to quoted prices in secondary markets for commitments to sell mortgage loans with similar characteristics (Level 2). Forward contracts — The fair value of mandatory loan sales commitments and derivative instruments such as forward sales of mortgage-backed securities that are utilized as economic hedging instruments is calculated by reference to quoted prices for similar assets (Level 2). Interest rate lock commitments — The fair value of IRLCs is calculated by reference to quoted prices in secondary markets for commitments to sell mortgage loans with similar characteristics. Expired commitments are excluded from the fair value measurement. Since not all IRLCs will become closed loans, we adjust our fair value measurements for the estimated amount of IRLCs that will not close. This adjustment is effected through the pull-through rate, which represents the probability that an IRLC will ultimately result in a closed loan. For IRLCs that are cancelled or expire, any recorded gain or loss is reversed at the end of the commitment period (Level 3). The pull-through rate is based on estimated changes in market conditions, loan stage and historical borrower behavior. Pull-through rates are directly related to the fair value of IRLCs as an increase in the pull-through rate, in isolation, would result in an increase in the fair value measurement. Conversely, a decrease in the pull-through rate, in isolation, would result in a decrease in the fair value measurement. Changes in the fair value of IRLCs are included within revenue in our condensed consolidated statements of operations. The following table presents the range and weighted-average pull-through rates used in determining the fair value of IRLCs as of the dates presented:
| September 30, 2023 |  | December 31, 2022
Range | 45% - 100% |  | 47% - 100%
Weighted-average | 88% |  | 87%
The following tables present the balances of assets and liabilities measured at fair value on a recurring basis, by level within the fair value hierarchy, as of the dates presented (in millions):
| September 30, 2023
| Total |  | Level 1 |  | Level 2 |  | Level 3
Cash equivalents: |  |  |  |  |  |  |
Money market funds | $ | 1,736 |  |  | $ | 1,736 |  |  | $ | — |  |  | $ | — |
Short-term investments: |  |  |  |  |  |  |
U.S. government treasury securities | 1,258 |  |  | — |  |  | 1,258 |  |  | — |
Corporate bonds | 135 |  |  | — |  |  | 135 |  |  | — |
Commercial paper | 14 |  |  | — |  |  | 14 |  |  | — |
U.S. government agency securities | 14 |  |  | — |  |  | 14 |  |  | — |
Mortgage origination-related: |  |  |  |  |  |  |
Mortgage loans held for sale | 96 |  |  | — |  |  | 96 |  |  | — |
Forward contracts - other current assets | 2 |  |  | — |  |  | 2 |  |  | — |
IRLCs - other current assets | 1 |  |  | — |  |  | — |  |  | 1 |
Total | $ | 3,256 |  |  | $ | 1,736 |  |  | $ | 1,519 |  |  | $ | 1 |
| December 31, 2022
| Total |  | Level 1 |  | Level 2 |  | Level 3
Cash equivalents: |  |  |  |  |  |  |
Money market funds | $ | 1,338 |  |  | $ | 1,338 |  |  | $ | — |  |  | $ | — |
Short-term investments: |  |  |  |  |  |  |
U.S. government treasury securities | 1,716 |  |  | — |  |  | 1,716 |  |  | — |
Corporate bonds | 161 |  |  | — |  |  | 161 |  |  | — |
Commercial paper | 10 |  |  | — |  |  | 10 |  |  | — |
U.S. government agency securities | 9 |  |  | — |  |  | 9 |  |  | — |
Mortgage origination-related: |  |  |  |  |  |  |
Mortgage loans held for sale | 41 |  |  | — |  |  | 41 |  |  | — |
Forward contracts - other current assets | 1 |  |  | — |  |  | 1 |  |  | — |
Total | $ | 3,276 |  |  | $ | 1,338 |  |  | $ | 1,938 |  |  | $ | — |
At September 30, 2023, the notional amounts of the economic hedging instruments related to our mortgage loans held for sale were $189 million and $232 million for our IRLCs and forward contracts, respectively. At December 31, 2022, the notional amounts of the economic hedging instruments related to our mortgage loans held for sale were $62 million and $90 million for our IRLCs and forward contracts, respectively. We do not have the right to offset our forward contract derivative positions. See Note 9 for the carrying amounts and estimated fair values of our convertible senior notes.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
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