A softer-than-expected spring selling season contributed to year-over-year declines in closings, revenue, and orders in the fiscal second quarter for Meritage Homes.
“Although below prior year levels, our second quarter 2026 absorptions reflected pockets of solid performance which accelerated community close outs in some markets,” Steven Hilton, executive chairman for Meritage Homes, said.
Orders declined 9% to 3,575 homes in the second quarter for the Meritage Homes, the No. 5 company on the 2026 Builder 100 list, largely driven by a 19% lower absorption pace. The declines were partially offset by a 14% increase in average community count. The average sales price on orders in the period decreased 3% to $385,000, primarily due to geographic mix.
Home closing revenue declined 14% year over year to $1.4 billion while closing volume declined 11% to 3,725 homes. The average sales price of closings fell 4% to $373,000. Home sales (down 29.1%) and orders (down 23.9%) compressed the most in Meritage’s West region, which includes California, Colorado, and Utah. Sales and orders were both down less than 5% in the builder’s Central region of Tennessee and Texas and its East region of Florida, Alabama, Georgia, Mississippi, North Carolina, and South Carolina.
“Our available home inventory and improved cycle times drove a backlog conversion rate of 200% and 3,725 closings this quarter, with nearly 60% generated from intra-quarter sales,” said CEO Phillippe Lord.
The builder said margins were compressed in the quarter largely to lower closing revenue and higher lot costs. However, Meritage Homes experienced direct cost savings on materials and quicker cycle times in the period.
In the period, Meritage Homes generated a profit of $91 million, or $1.37 per share, a 38% decrease from the second quarter 2025 profit of $147 million, or $2.04 per share. The company said the primary driver of lower profit in the period was lower home closing revenue.
The builder allocated $357 million toward land acquisition and development spend in the period and ended the quarter with approximately 73,200 lots owned or controlled. Meritage Homes added 1,7000 net new lots in the quarter, representing an estimated 13 future communities.
