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Real Estate Inventories
 12 Months Ended
Dec. 31, 2023
Inventory Disclosure [Abstract]  
Real Estate Inventories Real Estate Inventories
Real estate inventories consisted of the following (in thousands):
December 31, 2023December 31, 2022
Real estate inventories owned:  
Homes completed or under construction$1,402,762 $1,293,681 
Land under development1,299,074 1,279,394 
Land held for future development153,615 140,725 
Model homes306,565 231,157 
Total real estate inventories owned3,162,016 2,944,957 
Real estate inventories not owned:  
Land purchase and land option deposits175,467 228,892 
Total real estate inventories not owned175,467 228,892 
Total real estate inventories$3,337,483 $3,173,849 
 
Homes completed or under construction is comprised of costs associated with homes in various stages of construction and includes direct construction and related land acquisition and land development costs. Land under development primarily consists of land acquisition and land development costs, which include capitalized interest and real estate taxes, associated with land undergoing improvement activity. Land held for future development principally reflects land acquisition and land development costs related to land where development activity has not yet begun or has been suspended, but is expected to occur in the future.
Real estate inventories not owned represents deposits related to land purchase and land and lot option agreements. For further details, see Note 7, Variable Interest Entities.
Interest incurred, capitalized and expensed were as follows (in thousands):
Year Ended December 31,
 202320222021
Interest incurred$147,169 $124,529 $92,783 
Interest capitalized(147,169)(124,529)(92,783)
Interest expensed$— $— $— 
Capitalized interest in beginning inventory$191,411 $173,563 $182,228 
Interest capitalized as a cost of inventory147,169 124,529 92,783 
Interest previously capitalized as a cost of inventory, included in
   cost of sales
(116,933)(106,681)(101,448)
Capitalized interest in ending inventory$221,647 $191,411 $173,563 
 
Interest is capitalized to real estate inventory during development and other qualifying activities. Interest that is capitalized to real estate inventory is included in cost of home sales as related units are delivered.
Real Estate Inventory Impairments and Land Option Abandonments
Real estate inventory impairments and land option abandonments consisted of the following (in thousands):
 Year Ended December 31,
 202320222021
Real estate inventory impairments$11,500 $— $19,600 
Land and lot option abandonments and pre-acquisition costs2,657 8,747 1,238 
Total$14,157 $8,747 $20,838 
 
During the year ended December 31, 2023, we recorded a real estate inventory impairment charge of $11.5 million related to one community in the West segment where the carrying value exceeded the fair value based on a discounted cash flow analysis. The discount rate used to calculate fair value was 10%. We did not incur any impairment charges during the year ended December 31, 2022. During the year ended December 31, 2021, we recorded a real estate inventory impairment charge of $19.6 million related to one community in the West segment where the carrying value exceeded the fair value based on a discounted cash flow analysis. The discount rate used to calculate fair value was 12%.
In addition to owning land and residential lots, we also have option agreements to purchase land and lots at a future date. We have option deposits and capitalized pre-acquisition costs associated with the optioned land and lots. When the economics of a project no longer support acquisition of the land or lots under option, we may elect not to move forward with the acquisition. Option deposits and capitalized pre-acquisition costs associated with the assets under option may be forfeited at that time. 
Real estate inventory impairments and land option abandonments are recorded in cost of home sales in the consolidated statements of operations.