INVENTORY

Inventory consists of land in the process of development, developed lots, completed homes, model homes and raw land scheduled for development. Inventory is valued at cost unless the carrying value is determined to be not recoverable in which case the affected inventory is written down to net realizable value. Cost includes any related pre-acquisition costs that are directly identifiable with a specific property so long as those pre-acquisition costs are anticipated to be recoverable at the sale of the property.

A summary of inventory is as follows (in thousands):



	March 31, 2018		December 31, 2017
Completed home inventory and residential lots held for sale	$	117,889	$	106,043
Work in process and land under development	410,610		389,612
Total inventory	$	528,499	$	495,655

The Company capitalizes interest costs incurred to inventory during active development and other qualifying activities. Interest capitalized as cost of inventory is charged to cost of sales as related homes, land and/or lots are closed.

A summary of interest costs incurred, capitalized and expensed is as follows (in thousands):



	Three Months Ended March 31,
	2018			2017
Interest capitalized at beginning of period	$	10,474		$	9,417
Interest incurred	1,628			893
Interest charged to cost of sales	(881		)	(875		)
Interest capitalized at end of period	$	11,221		$	9,435