Meritage Homes Corporation
) has announced preliminary home order, closing and backlog numbers
for the second quarter of 2012.
Total home orders climbed 49% year over year to 1,353 units during
the quarter, helped by the company's investment in well-positioned
and high-priced land and new communities in desirable locations.
The company has reported a year-over-year increase in orders for
the past eight months.
The company's backlog totaled 1,611 homes as of June 30, 2012, up
62% from 994 homes as of June 30, 2011. The value of backlog grew
75% year over year to $457.7 million in the second quarter of
The cancellation rate in the reported quarter also improved to
13% of gross sales versus 15% in the second quarter of 2011. The
steady decline in the cancellation rate over the past two quarters
implies that the backlog will not be a headwind for the company.
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Meritage Homes' strategy to expand operations in growing cities is
encouraging, since demand is likely to be steadier there. The
gradual recovery in the housing market is also turning out to be
advantageous, going by the solid top-line growth and modest price
hikes in the recently concluded quarter.
The overall demand for new homes is expected to remain sluggish for
some time as oversupply of homes and tight credit standards may
Meritage Homes Corporation carries a Zacks #3 Rank in the near term
(Hold rating), similar to one of its peers,
Meritage Homes is one of the largest home building companies in the
United States. Meritage builds homes for first-time buyers for low
monthly payments, active adult buyers of higher age group and
move-up buyers (those who already have a home). The company also
offers high-priced luxury homes. Meritage has 150 communities in 15
metropolitan cities in the U.S.