Homebuilder Meritage Post 2Q Loss

Scottsdale, AZ, July 27, 2007–Meritage Homes reported a loss in its second quarter after the homebuilder booked major charges to write down the value of unsold inventory amid the housing sector slump.

The company reported a loss of $56.6 million, or $2.16 per share, in the latest quarter, after posting profit of $77.1 million, or $2.82 per share in the year-ago period.

The latest period included charges that took $70 million off the bottom line. Meritage wrote down $80 million in the value of properties in California, Florida, Nevada and Arizona — four of the hardest-hit regions during the housing collapse.

Home closing revenue in the quarter fell 37% to $568 million from $903 million, as the average selling price dropped 8%t.

Homebuilders have been caught with a glut of excess houses, forcing them to cut prices in order to stoke demand.

“Weakened demand and increased price incentives have resulted in lower margins on homes sold and more write-offs on remaining inventories,” said Chief Executive Steven Hilton.

Meritage did not provide a specific outlook for the coming quarters, but said it expects “the remainder of 2007 will be difficult.”