Inventory and Capitalized Interest

12 Months Ended

Dec. 31, 2022

Inventory

A summary of the Company’s inventory as of December 31, 2022 and 2021 is as follows:


	December 31,
(In thousands)	2022		2021
Single-family lots, land and land development costs	$	1,294,779	$	1,125,738
Land held for sale	3,331		4,312
Homes under construction	1,366,804		1,187,341
Model homes and furnishings - at cost (less accumulated depreciation: December 31, 2022 - $10,371; December 31, 2021 - $12,023)	61,200		59,268
Community development district infrastructure	29,701		20,089
Land purchase deposits	55,739		52,918
Consolidated inventory not owned	17,048		2,768
Total inventory	$	2,828,602	$	2,452,434

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, 2022 and 2021, we had 1,827 homes (with a carrying value of $431.7 million) and 1,266 homes (with a carrying value of $193.2 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. During the fourth quarter of 2022, we incurred $8.2 million of asset impairment charges.

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. During the fourth quarter of 2022, we wrote off $10.2 million of such costs related to land we no longer intend to purchase.

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, 2022, 2021 and 2020 is as follows:


	Year Ended December 31,
(In thousands)	2022		2021		2020
Capitalized interest, beginning of period	$	24,343	$	21,329	$	21,607
Interest capitalized to inventory	35,552		36,843		32,408
Capitalized interest charged to land and housing costs and expenses	(30,270)		(33,829)		(32,686)
Capitalized interest, end of period	$	29,625	$	24,343	$	21,329

Interest incurred	$	37,802	$	38,999	$	42,092