Inventories consist of (i) construction in process (“CIP”) and finished homes, including capitalized interest costs incurred under certain of the debt obligations discussed in Note 3, Debt, (ii) finished lots and land, and (iii) pre-acquisition land costs. CIP represents homes under construction or completed, including sold, speculative (“spec”) and model homes. CIP includes the cost of finished lots and all direct costs incurred to build homes. The cost of homes is expensed on a specific identification basis when the home is delivered to the customer. Finished lots are generally purchased just-in-time for construction through existing lot option contracts with land developers or third-party land banks and are transferred to CIP once construction begins. Costs related to finished lots or land under development held by third-party land bank partners incurred prior to the purchase of the finished lots, including due diligence costs, lot option fees and property taxes in relation to the existing controlled lot pipeline, are capitalized into pre-acquisition land costs.

(1)As of June 30, 2026 and December 31, 2025, included $43.0 million and $70.0 million, respectively, of consolidated inventory not owned in relation to finished lot sales to land bank partners for which the Company is obligated to repurchase.

On a quarterly basis, the Company reviews the performance and outlook of its communities to identify any indicators of potential impairment. Such indicators include gross margins or sales paces significantly below expectations, significant delays or changes in the planned construction for the community, and other known qualitative factors. In addition to considering market and economic conditions, the Company assesses current sales absorption levels and recent profitability, as well as future plans including cost management initiatives and remaining life cycle of the community. The Company looks for instances where sales prices for homes in a community or potential sales prices for the future sale of homes within a community would be at a level at which the carrying value of the inventory related to that community may not be recoverable. If indicators of potential impairment exist and the carrying value of the inventory related to a community is determined to not be recoverable because undiscounted cash flows expected to be generated by the community are lower than its carrying amount, impairment charges are recorded to write down the associated inventory to its estimated fair value.

Inventory impairment charges, with the exception of charges related to pre-acquisition land costs, are included in homebuilding cost of sales on the Condensed Consolidated Statements of Operations. No such impairment charges were recorded for the three and six months ended June 30, 2026 and 2025.

The Company reviews lot deposits for impairment on a quarterly basis and will record an impairment charge when it intends to forfeit its deposit on an individual lot or portfolio of lots. At that time, the Company will also record an impairment charge for costs associated with any of these deal abandonments included in pre-acquisition land costs. Lot deposit and deal abandonment impairment charges are included in SG&A on the Condensed Consolidated Statements of Operations. There were $1.4 million and $3.0 million of these charges included in SG&A for the three and six months ended June 30, 2026, respectively, and $0.6 million and $1.6 million for the three and six months ended June 30, 2025, respectively.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Capitalized interest as of beginning of the period	$	58,325	$	42,783	$	55,664	$	37,723
Interest incurred	30,967		28,812		61,133		55,478
Interest expensed	(583)		—		(1,342)		—
Interest charged to homebuilding cost of sales	(31,647)		(27,961)		(58,393)		(49,567)
Capitalized interest as of end of the period	$	57,062	$	43,634	$	57,062	$	43,634