Inventory and Capitalized Interest

12 Months Ended

Dec. 31, 2020

Inventory

A summary of the Company’s inventory as of December 31, 2020 and 2019 is as follows:


	December 31,
(In thousands)	2020		2019
Single-family lots, land and land development costs	$	868,288	$	858,065
Land held for sale	4,623		5,670
Homes under construction	898,966		756,998
Model homes and furnishings - at cost (less accumulated depreciation: December 31, 2020 - $12,909; December 31, 2019 - $12,723)	81,264		98,777
Community development district infrastructure	8,196		13,531
Land purchase deposits	45,357		28,532
Consolidated inventory not owned	9,914		7,934
Total inventory	$	1,916,608	$	1,769,507

Single-family lots, land and land development costs include raw land that the Company has purchased to develop into lots, costs incurred to develop the raw land into lots, and lots for which development has been completed, but which have not yet been used to start construction of a home.

Homes under construction include homes that are in various stages of construction. As of December 31, 2020 and 2019, we had 1,131 homes (with a carrying value of $186.9 million) and 1,459 homes (with a carrying value of $304.0 million), respectively, included in homes under construction that were not subject to a sales contract.

Model homes and furnishings include homes that are under construction or have been completed and are being used as sales models. The amount also includes the net book value of furnishings included in our model homes. Depreciation on model home furnishings is recorded using an accelerated method over the estimated useful life of the assets, which is typically three years.

The Company assesses inventory for recoverability on a quarterly basis. See Notes 1 and 3 to our Consolidated Financial Statements for additional details relating to our procedures for evaluating our inventories for impairment.

Land purchase deposits include both refundable and non-refundable amounts paid to third party sellers relating to the purchase of land. On an ongoing basis, the Company evaluates the land option agreements relating to the land purchase deposits. The Company expenses any deposits and accumulated pre-acquisition costs relating to such agreements in the period when the Company makes the decision not to proceed with the purchase of land under an agreement.

Capitalized Interest

The Company capitalizes interest during land development and home construction. Capitalized interest is charged to land and housing costs and expensed as the related inventory is delivered to a third party. The summary of capitalized interest for the years ended December 31, 2020, 2019 and 2018 is as follows:


	Year Ended December 31,
(In thousands)	2020		2019		2018
Capitalized interest, beginning of period	$	21,607	$	20,765	$	17,169
Interest capitalized to inventory	32,408		30,253		29,053
Capitalized interest charged to land and housing costs and expenses	(32,686)		(29,411)		(25,457)
Capitalized interest, end of period	$	21,329	$	21,607	$	20,765

Interest incurred	$	42,092	$	51,628	$	49,537