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Capitalized Interest (Notes)
 12 Months Ended
Dec. 31, 2018
Capitalized Interest [Abstract]  
Capitalized Interest
Capitalized Interest

Interest is capitalized to inventory and investment in unconsolidated joint ventures during development and other qualifying activities. Interest capitalized as a cost of inventory is included in cost of sales as related homes are closed. Interest capitalized to investment in unconsolidated joint ventures is amortized to equity in net income (loss) of unconsolidated joint ventures as related joint venture homes or lots close, or in instances where lots are sold from the unconsolidated joint venture to the Company, the interest is added to the land basis and included in cost of sales when the related lots or homes are sold to third-party buyers. For the years ended December 31, 2018, 2017 and 2016 interest incurred, capitalized and expensed was as follows:
 
Year Ended December 31,
 
2018
 
2017
 
2016
 
(Dollars in thousands)
Interest incurred
$
28,377

 
$
21,978

 
$
7,484

Interest capitalized to inventory
(27,393
)
 
(20,394
)
 
(7,484
)
Interest capitalized to investment in unconsolidated joint ventures
(984
)
 
(1,584
)
 
—

Interest expensed
$
—

 
$
—

 
$
—

 
 
 
 
 
 
Capitalized interest in beginning inventory
$
16,453

 
$
6,342

 
$
4,190

Interest capitalized as a cost of inventory
27,393

 
20,394

 
7,484

Capitalized interest acquired from unconsolidated joint ventures at consolidation
—

 
738

 
—

Capitalized interest transferred from investment in unconsolidated joint ventures to inventory upon lot acquisition
513

 
—

 
—

Contribution to unconsolidated joint ventures
—

 
—

 
(1
)
Previously capitalized interest included in cost of home sales
(18,678
)
 
(11,021
)
 
(5,331
)
Capitalized interest in ending inventory
$
25,681

 
$
16,453

 
$
6,342

 
 
 
 
 
 
Capitalized interest in beginning investment in unconsolidated joint ventures
$
1,472

 
$
—

 
$
—

Interest capitalized to investment in unconsolidated joint ventures
984

 
1,584

 
—

Capitalized interest transferred from investment in unconsolidated joint ventures to inventory upon consolidation
—

 
(76
)
 
—

Capitalized interest transferred from investment in unconsolidated joint ventures to inventory upon lot acquisition
(513
)
 
—

 
—

Previously capitalized interest included in equity in net income (loss) of unconsolidated joint ventures
(1,230
)
 
(36
)
 
—

Capitalized interest in ending investment in unconsolidated joint ventures
$
713

 
$
1,472

 
$
—

Total capitalized interest in ending inventory and investments in unconsolidated joint ventures
$
26,394

 
$
17,925

 
$
6,342

 
 
 
 
 
 
Capitalized interest as a percentage of inventory
4.5
%
 
4.0
%
 
2.2
%
Interest included in cost of home sales as a percentage of home sales revenue
3.7
%
 
2.0
%
 
1.1
%
 
 
 
 
 
 
Capitalized interest as a percentage of investment in and advances to unconsolidated joint ventures
2.1
%
 
2.6
%
 
—
%


For the year ended December 31, 2018, the Company expensed $1.1 million in interest previously capitalized to investments in unconsolidated joint ventures as the result of an other-than-temporary impairment to its investment in one joint venture. For more information, please refer to Note 6.

Contribution to unconsolidated joint ventures related to interest capitalized as a cost of inventory, which was then contributed by the Company to an unconsolidated joint venture formed in 2016.