Meritage Homes’ Lean and Mean Strategy: Lower Specs, Higher Returns?

Meritage Homes presented a comprehensive examination of their third-quarter results for 2025, which highlighted both achievements and challenges. The company’s performance was influenced by softer consumer demand and affordability issues, resulting in a mixed outcome for stakeholders. On the positive side, Meritage Homes reported a 4% year-over-year increase in orders to 3,636 units, bolstered by expanding their community count by 20% to 334 communities. The company also implemented a unique 60-day closing-ready guarantee, ensuring quick sale-to-close processes that contributed to their robust backlog conversion rate of 211%. Furthermore, Meritage’s strategic focus on affordable, move-in-ready homes has seemingly resonated with buyers, even as economic headwinds have dampened broader market demand. However, the economic climate posed significant challenges, as evidenced by a 12% decline in home closing revenue to $1.4 billion and a decrease in average selling prices due to higher incentives and discounts.