"There's a version of this market where buying sales becomes the default operating system for nearly everyone. When that happens, the question stops being whether incentives rise. They do. The real question becomes: who has the operational and balance-sheet self-control to decide where to lean inand where to hold the lineeven if it means slower near-term volume. The even bigger question for each homebuilding enterprise"
"Meritage Homes' Q4 2025 and full-year 2025 performance: a company with an operations-forward model, a spec-heavy strategy, and a community-by-community cadence that gives it enough control to choose a more balanced pace/price postureeven in a quarter management repeatedly described as unusually tough. Wolfe Research framed this bluntly, attributing Meritage's perceived outperformance to a well-managed conference call and a pragmatic near-term pivot, holding the line on discounts rather than chasing volume in a challenging incentive environment, leading to a better-than-feared 1Q26 Gross Margin guide."
Market conditions softened in Q4 2025 with affordability challenges and deteriorating buyer confidence. Absorption pace fell to 3.2 net sales per month due to seasonal weakness, lower buyer urgency, and a strategic decision to limit incentives. Meritage Homes operates an operations-forward, spec-heavy, community-by-community model that provides control over pacing and pricing. The company prioritized holding the line on discounts rather than chasing additional volume, accepting slower near-term sales to preserve gross margins and balance-sheet flexibility. That approach produced a better-than-feared 1Q26 gross margin guide despite an unusually tough quarter.
Read at www.housingwire.com
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