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 did not reduce our warranty reserve during the three months ended September 30, 2020, and reduced our warranty reserve by $0.6 million during the three months ended September 30, 2019. We reduced our warranty reserve by $1.3 million and $0.4 million during the nine months ended September 30, 2020 and 2019, respectively.

These adjustments are included in cost of home sales revenues on our consolidated statements of operations. Changes in our warranty accrual for the three and nine months ended September 30, 2020 and 2019 are detailed in the table below (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Beginning balance	$	11,221	$	9,768	$	9,731	$	7,970
Warranty expense provisions		2,293		1,665		6,345		5,433
Payments		(624)		(870)		(1,925)		(3,063)
Warranty adjustment		—		(573)		(1,261)		(350)
Ending balance	$	12,890	$	9,990	$	12,890	$	9,990