In combination, top line growth and margin expansion helped drive higher earnings per share of $1.82.
This is an increase of 36% over the prior year's third quarter adjusted earnings of $1.34 per share.
Inclusive of these strong third quarter numbers through the first 9 months of 2021, our home sale revenues were up 22% to $9.2 billion while our reported earnings per share are up 36% to $4.85.
More specifically, consistent with our constructive view on the housing market, we have invested $2.9 billion in land acquisition and development so far this year.
Our $2.9 billion of land spend is comparable to what we invested for the full year in both 2020 and in the pre-pandemic year of 2019, and we remain fully on track to invest approximately $4 billion in total for the full year of 2021.
At the end of the third quarter, our lots under option had grown to 54% of our total controlled lot position compared to when I set the initial 50% option target, we have over 65,000 more lots under option and now view 50% as the floor rather than the ceiling in terms of how we control our land assets.
Consistent with our capital allocation priorities, along with investing $948 million more in land acquisition and development through the first 9 months of 2021 compared with last year, we have also returned $726 million to shareholders through share repurchases and dividends and have paid off nearly $800 million in debt this year, leaving us with a net debt-to-capital ratio of only 5.7%.
Finally, consistent with our strategic focus, our operating and financial performance has helped drive a return on equity of 26% for the trailing 12 months.
On the other hand, our results have certainly benefited from the remarkable demand and pricing environment the homebuilding industry has experienced over the past 18 months.
For others, it's changing lead times where order fulfillment has gone from 6 weeks to 16 weeks, back to 11 weeks and then back to 16 weeks.
Our home sale revenues for the third quarter increased 18% over last year to $3.3 billion.
The increase in revenues was driven by a 9% increase in closings to 7,007 homes in combination with an 8% or $37,000 increase in average sales price to $474,000.
The higher average sales price realized in the third quarter reflects meaningful price increases we've realized across all buyer groups, with first-time up 8%, move-up up 10% and active adult up 8%.
The mix of homes we delivered in the third quarter included 32% from first-time buyers, 44% from move-up buyers and 24% from active adult buyers.
In last year's third quarter, 30% of homes delivered were first-time, 45% were move-up and 25% were active adult.
Our net new orders for the third quarter were 6,796 homes, which represents a 17% decrease from last year that was driven primarily by a 14% decline in year-over-year community count.
Our orders from first-time buyers decreased 20% compared with last year.
This decrease was driven primarily by our actions to restrict sales as our first-time community count was only down 6% compared with last year.
In contrast, our orders from move-up and active adult buyers decreased 22% and 4%, respectively, which was driven by comparable 22% and 5% decreases in community count, respectively.
In the third quarter, we operated from an average of 768 communities.
Consistent with the guide in our recent market update, this is down 14% from last year's average of 892 communities.
Our Q3 community count should be the low watermark for the year as we expect our fourth quarter community count to increase to approximately 775 active communities.
Our unit backlog at the end of the third quarter was up 33% over last year to 19,845 homes.
The dollar value of our backlog increased an even greater 56% to $10.3 billion as we benefited from robust price increases realized over the course of this year.
At the end of the third quarter, we had 18,802 homes under construction, of which 83% were sold and 17% respec.
We have almost 900 more spec homes in production than we did in the second quarter as we have been working to increase spec availability, particularly in our Centex communities.
Given that 90% of our specs are early in the construction cycle and we have only 109 finished specs, these units are about helping to position the company for 2022, rather than providing closings in 2021.
We faced similar dynamics within our production of sold units as 2/3 of these homes are in the earlier stages of construction, and we can see gaps in the supply of key building products needed to complete these homes.
Given these conditions, we believe it appropriate to update our fourth quarter guide for expected fourth quarter deliveries and currently expect to deliver approximately 8,500 homes in the fourth quarter, which would represent an increase of 24% over the fourth quarter of last year.
Reflective of these conditions, our average price in backlog increased 18% or $78,000 over last year to $519,000.
Although more than half of our quarter end backlog is expected to deliver in 2022, we will continue to see the benefit of rising prices in our fourth quarter as our average closing price is expected to be $485,000 to $490,000.
At the midpoint, this would represent an increase of approximately 10% over last year.
Our reported homebuilding gross margin in the third quarter increased 200 basis points over last year to 26.5%.
Given that our third quarter closings absorbed the elevated lumber prices from earlier this year, expanding our gross margin by 200 basis points attest to the strong pricing environment the industry experienced over the past year.
It's worth noting that the strong market conditions also contributed to another step down in incentives in the period as discounts fell to 1.3%.
This is down from 3% last year and down 60 basis points from the second quarter of this year.
That said, with the changing mix of homes we currently expect to close in the fourth quarter, coupled with the added material, labor and logistics costs we're paying to get homes closed, we currently expect our fourth quarter gross margin to be 26.6% or 26.7%.
This would represent an increase of 160 to 170 basis points over last year's fourth quarter and an increase of 10 to 20 basis points over the third quarter of this year.
Our SG&A expense for the third quarter was $321 million or 9.6% of home sale revenues.
Prior year SG&A expense for the period was $271 million for a comparable 9.6% home sale revenues.
Given there's still increase in closings, we expect [Technical Issues] in the upcoming quarter expected to fall to a range of 8.9% to 9.2% of home sale revenues.
Our third quarter pre-tax income was $49 million versus $64 million last year.
The company's reported tax expense in the third quarter was $145 million, for an effective tax rate of 23.3%.
In the comparable prior year period, our effective rate was 14% as we realized a tax benefit of $53 million associated with energy tax credits recognized in the period.
For the third quarter, our reported net income was $476 million or $1.82 per share.
This compares with prior year adjusted net income, excluding the impact of the energy tax credits, of $363 million or $1.34 per share.
Our business continues to generate strong cash flow, which allowed us to end the quarter with $1.6 billion of cash after significant investment in the business and continued shareholder distributions in the quarter.
In the quarter, we repurchased 5.1 million shares or about 2% of our outstanding common shares for $261 million at an average price of $51.07 per share.
The $261 million in stock repurchase is a sequential increase of $61 million from the second quarter of this year.
We also invested $1.1 billion in land acquisition and development in the third quarter.
This brings our total land-related spend in 2021 to $2.9 billion and keeps us on track to invest approximately $4 billion of land acquisition and development for the year, which would be an increase of almost 40% over last year.
We ended the third quarter with a debt-to-capital ratio of 22.4%, which is down from 29.5% at the end of last year.
Adjusting for our cash position, our net debt-to-capital ratio at the end of the quarter was 5.7%.
We ended the third quarter with approximately 223,000 lots under control, of which 54% were controlled through options.
The most typical increase in the quarter was in the range of 1% to 3%, although some of our divisions were able to push pricing in select communities a little more aggressively.
We continue to see a very strong financial profile among our homebuyers with the average FICO score remaining above 7 50 and loan-to-value of 83% based on users of our mortgage company.

Summary:
In combination, top line growth and margin expansion helped drive higher earnings per share of $1.82.
Our home sale revenues for the third quarter increased 18% over last year to $3.3 billion.
Our unit backlog at the end of the third quarter was up 33% over last year to 19,845 homes.
The dollar value of our backlog increased an even greater 56% to $10.3 billion as we benefited from robust price increases realized over the course of this year.
For the third quarter, our reported net income was $476 million or $1.82 per share.