On the balance sheet, we expanded both our total lot position, share of lots controlled by option, while retiring $14 million in debt.
With these results and confidence in our expectations for the fourth quarter, we are once again raising full year guidance, highlighted by earnings per share of at least $3.25.
First, at the end of our third quarter, we had more than 1,500 homes in backlog scheduled to close next year, nearly double the level at this time last year.
This will drive SG&A leverage, pushing SG&A below 11% next year.
Next year, we expect at least $5 million in GAAP interest savings with further reductions in subsequent years.
Second, the roll out of charity title, our title business committed to contributing 100% of its profits to charity continues to gain momentum.
Next year, we expect to provide title for two-thirds of our customers, which should generate philanthropic resources of over $1 million a year on a run rate basis.
Looking at our third quarter results compared to the prior year, new home orders decreased approximately 13% to 1,199 as a higher sales pace helped to offset a reduction in average community count.
Homebuilding revenue increased nearly 7% to $567 million on 1% higher closings and a 6% higher average sales price.
Our gross margin, excluding amortized interest, impairments and abandonments was 24.2%, up approximately 300 basis points to the highest level in more than a decade.
SG&A was down 60 basis points as a percentage of total revenue to 11.1% as we benefited from improved overhead leverage.
Adjusted EBITDA was $78.8 million, up over 45%.
Our EBITDA margin was 13.8%.
Interest amortized as a percentage of homebuilding revenue was 4%, down 10 basis points.
And net income from continuing operations was $37.1 million, yielding earnings per share of $1.22, more than double earnings per share for the same period last year.
We now expect EBITDA to be over $250 million.
Our full year EBITDA guidance equates to earnings per share of at least $3.25, up from last quarter's guidance of above $3.
We now expect our return on average equity for the full year to be approximately 15%.
If you exclude our deferred tax asset, which doesn't generate profits, our ROE would be about 22%.
Our ASP should be above $410,000.
Gross margin should be up more than 100 basis points year-over-year.
SG&A on an absolute dollar basis should be down about 10%.
Our interest amortized as a percentage of homebuilding revenue should be under 4%, and our tax rate will be about 25%.
Combined, this should drive earnings per share up over 20%.
In addition, we expect to repurchase over $55 million of debt, bringing our full year total to at least $80 million.
Our increased land spending in the quarter helped us grow our active lot count to over 19,000.
We also increased our option percentage in the third quarter and now control nearly half of our active lots through options, up from less than 30% in the same period last year.
Given our current pipeline of deals, we expect to continue to grow our land position to over 20,000 lots by the end of fiscal '21.
In the third quarter, we spent over $140 million on land and development and we expect to spend around $600 million for the full year, with higher land spending and a big increase in our option lot position, we're creating a framework to sustain profitable growth in the years ahead.
We ended the third quarter with over $600 million of liquidity, up about 50% versus the prior year, with unrestricted cash in excess of $360 million and nothing outstanding on our revolver.
During the quarter, we retired approximately $14 million of our senior notes.
And with two remaining term loan repayments, we're on a clear path to achieve our goal of bringing our total debt below $1 billion before the end of fiscal '22.
Our net debt to trailing 12-month adjusted EBITDA fell below 3 times, down from 8 times five years ago.
Over the last five years, we've grown EBITDA by more than 60%, improved our return on assets by more than five percentage points and reduced debt by more than $300 million.

Summary:
And net income from continuing operations was $37.1 million, yielding earnings per share of $1.22, more than double earnings per share for the same period last year.