Warranties

3 Months Ended

Mar. 31, 2020

Warranties [Abstract]

Warranties

7. Warranties

Estimated future direct warranty costs are accrued and charged to cost of home sales revenues in the period when the related home sales revenues are recognized. Amounts accrued, which are included in accrued expenses and other liabilities on the consolidated balance sheets, are based upon historical experience rates. We subsequently assess the adequacy of our warranty accrual on a quarterly basis through an internal model that incorporates historical payment trends and adjust the amounts recorded if necessary. Based on warranty payment trends relative to our estimates at the time of home closing, we reduced our warranty reserve by $1.1 million and increased our reserve by $22 thousand during the three months ended March 31, 2020 and 2019, respectively, which is included in cost of home sales

revenues on our consolidated statements of operations.  Changes in our warranty accrual for the three months ended March 31, 2020 and 2019 are detailed in the table below (in thousands):

	Three Months Ended March 31,
	2020		2019
Beginning balance	$	9,731	$	7,970
Warranty expense provisions		1,777		1,661
Payments		(689)		(1,020)
Warranty adjustment		(1,092)		22
Ending balance	$	9,727	$	8,633