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Real Estate Inventories
 6 Months Ended
Jun. 30, 2025
Inventory Disclosure [Abstract]  
Real Estate Inventories Real Estate Inventories
Real estate inventories consisted of the following (in thousands):
June 30, 2025December 31, 2024
Real estate inventories owned:
Homes completed or under construction$1,515,598 $1,294,928 
Land under development1,124,896 1,174,564 
Land held for future development159,022 157,348 
Model homes289,588 285,550 
Total real estate inventories owned3,089,104 2,912,390 
Real estate inventories not owned:
Land purchase and land option deposits212,198 241,069 
Total real estate inventories not owned212,198 241,069 
Total real estate inventories$3,301,302 $3,153,459 
 
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):
 Three Months Ended June 30,Six Months Ended June 30,
 2025202420252024
Interest incurred$20,374 $30,378 $41,693 $66,534 
Interest capitalized(20,374)(30,378)(41,693)(66,534)
Interest expensed$— $— $— $— 
Capitalized interest in beginning inventory$184,536 $226,957 $186,370 $221,647 
Interest capitalized as a cost of inventory20,374 30,378 41,693 66,534 
Interest previously capitalized as a cost of
inventory, included in cost of sales
(25,578)(39,164)(48,731)(70,010)
Capitalized interest in ending inventory$179,332 $218,171 $179,332 $218,171 
 
Interest is capitalized to real estate inventory during development and other qualifying activities. During all periods presented, we capitalized all interest incurred to real estate inventory in accordance with ASC Topic 835, Interest, as our qualified assets exceeded our debt. Interest that is capitalized to real estate inventory is included in cost of home sales or cost of land and lot sales as related units or lots are delivered. Interest that is expensed as incurred is included in other (expense) income, net.
Real Estate Inventory Impairments and Land Option Abandonments
Real estate inventory impairments and land and lot option abandonments and pre-acquisition charges consisted of the following (in thousands):
 Three Months Ended June 30,Six Months Ended June 30,
 2025202420252024
Real estate inventory impairments$11,000 $— $11,000 $— 
Land and lot option abandonments and pre-acquisition charges2,096 968 3,169 1,370 
Total$13,096 $968 $14,169 $1,370 
Impairments of real estate inventory relate primarily to projects or communities that include homes completed or under construction. During the three and six months ended June 30, 2025, we recorded a real estate inventory impairment charge of $11.0 million related to one active community in the West reporting segment where the carrying value of the community exceeded the fair value based on a discounted cash flows analysis. The impairment charge occurred in our second quarter reporting period, and the discount rate used to calculate fair value was 12%. We considered both market risk and community-specific risk to arrive at a discount rate appropriate for the level of total risk associated with this community.There were no real estate inventory impairment charges recorded during the three or six months ended June 30, 2024.
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.