10. Interest

Interest is capitalized to inventories while the related communities are being actively developed and until homes are completed. As our qualifying assets exceeded our outstanding debt during the three and nine months ended September 30, 2017 and 2016, we capitalized all interest costs incurred during these periods, except for interest incurred on capital leases of equipment related to our golf course operations.

Our interest costs are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Interest capitalized beginning of period	$	35,668		26,577	$	28,935		21,533
Interest capitalized during period		13,338		6,743		31,902		19,772
Less: capitalized interest in cost of sales		(8,794)		(5,192)		(20,625)		(13,177)
Interest capitalized end of period	$	40,212		28,128	$	40,212		28,128