Meritage Homes Corporation (MTH), the fifth-largest public homebuilder in the U.S., is facing significant challenges amid a slowing housing market, characterized by high mortgage rates and inflation. Following its first-quarter release on April 22, MTH’s earnings per share (EPS) estimates have seen a downward revision, leading to a Zacks Rank #5 (Strong Sell).
As of the latest forecasts, MTH’s revenue is projected to decline by 6% year-over-year (YoY) in 2026, following an 8% drop in 2025. The company’s adjusted earnings are expected to fall by 29% YoY in 2026. Furthermore, the average 30-year fixed-rate mortgage currently stands at approximately 6.37%, a significant rise from the 2.65% to 4% range seen between early 2020 and early 2022.
MTH shares have increased by 400% over the past 15 years but are down 9% in the last year, contrasting sharply with a 30% uptick in the benchmark S&P 500 index. Given the current macroeconomic pressures, investors are advised to exercise caution regarding MTH stock as market conditions remain unfavorable.
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