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 condensed consolidated balance sheets, are based upon historical experience rates. We subsequently assess the adequacy of our warranty accrual on a quarterly basis through a 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 increased our warranty reserve by $0.6 million during the three months ended June 30, 2025, and we reduced our warranty reserve by $0.2 million during the three months ended June 30, 2024. We reduced our warranty reserve by $1.4 million and $1.5 million during the six months ended June 30, 2025 and 2024, respectively, which is included as a reduction to cost of home sales revenues on our condensed consolidated statements of operations. Changes in our warranty accrual for the three and six months ended June 30, 2025 and 2024 are detailed in the table below (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Beginning balance	$	11,470	$	11,212	$	12,762	$	11,524
Warranty expense provisions		2,475		2,470		4,664		5,140
Payments		(1,257)		(1,841)		(2,801)		(3,532)
Warranty adjustment		577		(243)		(1,360)		(1,534)
Ending balance	$	13,265	$	11,598	$	13,265	$	11,598