Meritage Homes Reports 4.7% Revenue Growth to $6.34 Billion for Fiscal Year 2024

Meritage Homes Corporation reported a solid financial performance for the fiscal year ending December 31, 2024, with home closing revenue reaching $6.34 billion, a 4.7% increase from $6.06 billion in 2023. The growth was driven by a significant 11.7% rise in home closing volume, which totaled 15,611 units, marking the highest closing volume in the company's history. However, the average sales price (ASP) for home closings decreased by 6.3% to approximately $406,200, attributed to a greater utilization of financing incentives and a shift in product mix towards more entry-level homes, which constituted 92% of sales orders compared to 87% in the previous year.

The company also experienced a notable reduction in backlog, with the number of homes in backlog decreasing by 39.4% to 1,544 units valued at $629.5 million, down from 2,549 units valued at $1.1 billion in 2023. This decline was largely due to improved backlog conversion rates, facilitated by the company's strategy of offering move-in ready homes. The cancellation rate for home orders improved to 9.4%, down from 12.8% in 2023, reflecting the effectiveness of the company's operational strategies.

In terms of strategic developments, Meritage Homes continued to focus on expanding its market presence, investing approximately $2.5 billion in land acquisition and development, which resulted in securing around 37,000 net new lots, a significant increase from 16,000 in 2023. The company ended the year with 85,613 lots under control, compared to 64,313 in the previous year. Additionally, Meritage Homes introduced a 60-day closing ready guarantee, aimed at enhancing customer confidence and aligning more closely with typical resale home closing timelines.

Operationally, Meritage Homes maintained a workforce of approximately 1,898 employees, including 971 in construction and warranty operations. The company’s financial services segment also contributed positively, with profits increasing to $14.4 million from $12.5 million in 2023, driven by higher home closing volumes. The company’s liquidity position remained strong, ending the year with cash and cash equivalents of $651.6 million, although this was a decrease from $921.2 million at the end of 2023.

Looking ahead, Meritage Homes expressed confidence in its strategic initiatives to capture a larger market share, particularly among first-time and first move-up buyers. The company plans to continue leveraging its all-spec home building strategy and financing incentives to enhance affordability and streamline the home buying process. The management remains focused on maintaining liquidity and achieving its financial goals, including higher home closing revenue and strong gross margins, while navigating the challenges posed by market conditions and interest rates.