We achieved our highest annual sales orders of 13,808 homes and closing of 12,801 homes.
Our 2021 annual home closing revenue was also a record at $5.1 billion as was our full-year home closing gross margin of 27.8%.
Price increases due to sustained strong demand, coupled with our operational efficiency and the leveraging of our fixed cost over higher home closing revenue drove our lowest full-year SG&A rate of 9.2%, translating to our next full-year diluted earnings per share of $19.29.
Our community count grew 33% year over year.
We're earning the spring selling season with 259 active selling communities and forecasting continued double-digit community growth into '22.
We also joined more than 2,100 other companies by signing the CEO Action for diversity and inclusion pledge.
Given the long-range cycle times, our fourth quarter closings totaled 3,526 homes, which was down 6% over the challenging comps of prior year.
Entry-level comprised 81% of closings, up from 72% in the prior year.
Total orders of 3,367 for the fourth quarter of 2021 reflected an increase of 6% year over year, driven by a 24% increase in average active community count, which was partially offset by the decrease in average absorptions.
The decline from 5.3 per month in Q4 2020 to 4.5 per month in this current quarter was driven by the tightly metered order pace across most of our footprint, as well as our new community openings occurring late in the quarter.
Entry-level provided 80% of total orders up from 72% in the fourth quarter last year.
Entry-level also represented 79% of our average active communities, compared to 67% a year ago.
Our Central region, comprised of Texas, led in terms of regional average absorption pace with 5.3 per month this quarter.
This 5% year-over-year decline was offset by 17% greater average asset communities, which together contributed to an 11% increase in order volume.
With the state's favorable economic development and growth environment, sustained home buying demand generated a 20% year-over-year increase in ASP orders, the highest increase in all three regions.
To address affordability challenges in the market, our East region continued to shift its product mix toward entry-level, which made up 81% of its average asset communities.
Out of our three regions, the East Region average community count increased the most by 34% year over year, which generated order volume growth of 6%.
The East region increase in community count was offset by a 21% decrease in average absorption pace.
The West Region's fourth quarter 2021 order volume increased 2% year over year mainly due to 19% more average communities, which was partially offset by 14% lower average absorption pace.
Of our home closings this quarter, 77% came from previously started spec inventory, which increased from 71% a year ago.
We ended the period with nearly 3,200 spec home in inventory or an average of 12.3 per community as we push to get homes on the ground.
This compared to approximately 2,500 specs or an average of 12.9 in the fourth quarter of 2020.
At December 31, 2021, less than 5% of total stacks were completed versus our typical run rate of one-third due to sustained demand and supply constraints.
We accelerate starts to over 3,700 homes in the fourth quarter from approximately 3,400 homes in the third quarter and in line with approximately 3,800 homes in the second quarter, and we expect to continue ramping up-spec parts in 2022 as our community count increases.
Having available spec is not necessary for our 100% spec building strategy.
We ended the quarter with a backlog of over 5,600 units as our conversion rate declined from 71% last year to 60% this year, resulting from elongated cycle times.
However, it was a slight improvement from 57% in the third quarter.
Despite these expanded timelines, we still believe our streamlined operations and 100% spec building strategy for entry-level homes has given us a competitive advantage in today's supply chain and labor market conditions by locking in volume and providing workable consistency to our traders.
These strong vendor relationships helped us deliver over 12,800 homes in 2021 and are key to accelerating starts in 2022.
The 6% year-over-year home closing revenue growth to $1.5 billion in the fourth quarter of 2021 was a result of a 13% increase in ASP due to strong market demand, even as we shifted our product mix toward entry-level homes.
This was partially offset by a 6% decline in home closing volume due to closing time being impacted by supply chain issues.
The 500-bps improvement in fourth quarter 2021 home closing gross margin to 29% from 24% a year ago was primarily driven by a full year of pricing power, which outweighed accelerated cost pressures in almost all cost categories.
SG&A as a percentage of home closing revenue was 8.5% for the current quarter, an 80-bps improvement over prior year.
One-time items, including payments to our general counsel, who retired in December of 2021 and a change in the company's retirement vesting eligibility for equity awards totaled $5 million and impacted SG&A expenses by 30 bps in the third quarter of 2021.
The fourth quarter 2021 effective income tax rate was 23.8%, compared to 21.9% in the prior years.
Pricing power expanded gross margin and improved overhead leverage, combined with lower outstanding share count, all led to the 57% year-over-year increase in fourth-quarter diluted earnings per share to $6.25.
To highlight a few full year 2021 results on a year-over-year basis, we generated a 74% increase in net earnings order unit held steady at about 13,800 for both years.
Closings were up 8%.
We had a 580-bps expansion of our home closing gross margin to 27.8% in 2021, and SG&A as a percentage of home closing revenue improved 80 bps to 9.2%.
Diluted earnings per share was $19.29, a 75% increase from 2020.
At December 31, 2021, our cash balance was $618 million, compared to $746 million at December 31, 2020, reflecting increased investments in real estate and development and inventory rose $956 million during the year, as well as for share repurchases.
During full year 2021, we repurchased about 640,000 shares of stock for $61 million, of which by 244,000 shares totaling $24 million were repurchased during the fourth quarter.
Our net debt-to-cap ratio was 15.1% at December 31, 2021, compared with 10.5% at December 31, 2020.
In December, we extended the maturity date of our $780 million unsecured revolving credit facility to December 2026.
At December 31, 2021, with over 75,000 total lots under control, our land book increased 35% from year-end 2020, and we had nearly 60 years supply of lots, based on trailing 12-month closing.
While this is slightly above our goal of four- to five-year supply of lots, since we're in growth mode, the calculation on prior year's closings is a bit misleading, based on our forward closing projection of about 15,000 homes for 2022, we have a five-year supply of lots.
We secured 9,000 net new lots this quarter compared to approximately 11,200 in the prior Q4.
This new loss will translate to an estimated 45 net new communities, of which 93% are entry-level.
To address the higher orders pace of entry-level product, the average community size we contracted for this quarter was nearly 200 lots, up from the fourth quarter of 2020 where the average lot size was about 150 lots.
During the fourth quarter of 2021, we navigated around municipal delays and supply and labor constructions to open 48 new communities.
We grew our community count by 23 net communities from 236 at the start of the quarter to 259 at year-end 2021.
On a year-over-year basis, we were up 33% or 64 net community.
During the full year, we opened 163 communities, up 55% from 105 in 2020.
We are already seeing increased volume from our higher community count and expect to continue to benefit from incremental orders and closings in 2022 and beyond.
We spent about $507 million unlaid acquisition and development this quarter, in line with last year's Q4 spend and our targeted quarterly run rate.
We expect land spend to be around $2 billion annually in 2022 and beyond as we get to and maintain our 300 communities.
About 65% of our total lot inventory at December 31, 2021, was owned and 35% was optioned compared to prior year with 69% owned inventory and 41% options.
With over 80% of our own land currently actively under development and ready to open as a new community over the next several quarters, we believe we are nearing an inflection point on our owned versus option percentages due to our community ramp up stabilizing over the next several quarters.
For the full year 2022, we're projecting total closings to be between 14,500 and 15,500 units, home closing revenue of $6.1 billion to $6.5 billion, home closing gross margin around 27.75%, an effective tax rate of about 25%, and diluted earnings per share in the range of $23.15 to $24.65.
We expect full-year community count year-over-year growth of 15% to 20%.
As for Q1 2022, we're projecting total closings to be between 2,800 and 3,000 units home closing revenue of $1.2 billion to $1.3 billion, home closing gross margin of 28.25% to 28.5%, and diluted earnings per share in the range of $4.45 to $4.85.
Their leadership grow our significant order volume closing, as well as a 33% year-over-year ramp-up in community count growth while navigating challenging conditions.

Summary:
Given the long-range cycle times, our fourth quarter closings totaled 3,526 homes, which was down 6% over the challenging comps of prior year.
Total orders of 3,367 for the fourth quarter of 2021 reflected an increase of 6% year over year, driven by a 24% increase in average active community count, which was partially offset by the decrease in average absorptions.
The 6% year-over-year home closing revenue growth to $1.5 billion in the fourth quarter of 2021 was a result of a 13% increase in ASP due to strong market demand, even as we shifted our product mix toward entry-level homes.
Pricing power expanded gross margin and improved overhead leverage, combined with lower outstanding share count, all led to the 57% year-over-year increase in fourth-quarter diluted earnings per share to $6.25.
On a year-over-year basis, we were up 33% or 64 net community.
We are already seeing increased volume from our higher community count and expect to continue to benefit from incremental orders and closings in 2022 and beyond.
For the full year 2022, we're projecting total closings to be between 14,500 and 15,500 units, home closing revenue of $6.1 billion to $6.5 billion, home closing gross margin around 27.75%, an effective tax rate of about 25%, and diluted earnings per share in the range of $23.15 to $24.65.