Meritage Homes Reports Third Quarter and Year-to-Date 2008 Results



 THIRD QUARTER RESULTS (PERCENT CHANGE 2008 VS. 2007):
 -- Net loss of $144M or $(4.69) per share, includes $55M pre-tax real
    estate-related charges and a $106M deferred tax asset valuation
    allowance; pre-tax loss of $7M excluding these charges
 -- Deterioration in credit markets and the effects of Hurricane Ike
    evident in declines of 25% in total closings and 29% in net
    orders, with cancellation rate of 40%, resulting in lower revenue,
    increase in unsold homes and reduced cash flow from operations
    in the quarter

 YEAR-TO-DATE RESULTS (PERCENT CHANGE 2008 VS. 2007):
 -- Reduced general & administrative expenses by $24M, to 4.7% of
    total revenue (4.4% in 2007)
 -- Reduced spec inventory by 27% and generated $106M cash flow from
    operations
 -- Ended September with $119M cash and no bank debt; $338M available
    under credit facility
 -- Maintained asset-light strategy by reducing lot supply to 20,738,
    or approximately 3.3 years, with just 1.4 years supply (9,095
    lots) owned
 -- Reduced net debt-to-capital ratio at September 30 to 46% in 2008,
    from 50% in 2007

SCOTTSDALE, Ariz., Oct. 27, 2008 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE:MTH) today announced third quarter and year-to-date results for the periods ended September 30, 2008.



                Summary Operating Results (Unaudited)
           (Dollars in millions, except per share amounts)
 ---------------------------------------------------------------------
                            Three Months Ended     Nine Months Ended
                               September 30,         September 30,
                           2008    2007    %Chg   2008    2007   %Chg
 ---------------------------------------------------------------------
 Homes closed (units)      1,423   1,894   -25%   4,139   5,548   -25%
 Home closing revenue       $373    $575   -35%  $1,118  $1,719   -35%
 ---------------------------------------------------------------------
 Sales orders (units)      1,013   1,435   -29%   4,120   5,242   -21%
 Sales order value          $254    $390   -35%  $1,061  $1,532   -31%
 ---------------------------------------------------------------------
 Ending backlog (units)                           2,269   3,379   -33%
 Ending backlog value                              $613  $1,014   -40%
 ---------------------------------------------------------------------
 Net loss (including
  write-offs)              $(144)  $(119)  -21%   $(213)  $(160)  -33%
 Adjusted pre-tax (loss)/
  earnings* (excluding
  write-offs)                 (7)     24  -127%     (12)     83  -115%
 Diluted EPS (including
  write-offs)             $(4.69) $(4.52)   -4%  $(7.37) $(6.10)  -21%
 ---------------------------------------------------------------------
 * see "Operating Results" for non-GAAP reconciliation between net
   loss and adjusted pre-tax (loss)/earnings

CONTINUED SLOWING IN HOUSING MARKET RESULTS IN FURTHER IMPAIRMENTS

Meritage reported a net loss of $144 million for the third quarter of 2008, including real estate-related and joint venture charges of $55 million (pre-tax), and a deferred tax asset valuation allowance of $106 million. By comparison, the net loss of $119 million reported for the third quarter of 2007 included $172 million (pre-tax) of real estate-related and joint venture charges, and an additional $45 million (pre-tax) charge to impair goodwill. Excluding these primarily non-cash charges, the third quarter 2008 pre-tax loss was $7 million, compared to pre-tax income of $24 million in the third quarter of 2007, reflecting lower closing volume and revenue, increased use of incentives and reduced margins on homes closed.

Third quarter 2008 home closing revenue declined 35% from the prior year, as a result of 25% lower closings and a 14% decline in average sale prices.

Gross margins excluding impairment charges fell, reflecting lower net sales prices on fewer deliveries, partially offset by construction cost reductions and a lower asset basis on homes closed due to prior impairments. Third quarter gross margins were 12.7% before impairments in 2008, compared to 14.8% before impairments in 2007.

"While Hurricane Ike hurt our Houston operations in early September, the financial crisis and slowing economy have damaged buyers' confidence and resulted in further declines in home sales and asset values," said Steven J. Hilton, chairman and CEO of Meritage. "That prompted us to record further real estate impairments in our third quarter. Based on greater uncertainty as to the timing of an eventual recovery in homebuilding, we concluded this quarter that a valuation allowance against our deferred tax asset was warranted."

Impairments of existing projects accounted for $35 million of the total third quarter real estate-related charges, with additional impairments of $13 million on land held for sale, $6 million of option terminations and $1 million related to joint venture impairments. More than half of the third quarter 2008 real estate impairments were in Arizona, primarily from the four attached home communities that Meritage has in Phoenix. California made up another 20% of the impairments, as housing markets there were further battered by falling prices and an over-supply of new and existing inventory.

Meritage reported a year-to-date net loss of $213 million in 2008, including primarily non-cash real estate-related and joint venture charges of $154 million (pre-tax), and the deferred tax asset valuation allowance of $106 million. By comparison, the year-to-date net loss of $160 million in 2007 included $269 million (pre-tax) of real estate-related and joint venture charges, and a $73 million (pre-tax) charge to impair goodwill. Year-to-date 2008 home closing revenue also declined 35% from the prior year, consistent with the third quarter, as a result of 25% lower closings and a 13% decline in average sale prices.

Meritage controlled overhead costs relative to its decline in revenue, reducing general and administrative expenses by $24 million (31%) year-to-date, to 4.7% of year-to-date revenue in 2008, compared to 4.4% in 2007. Excluding a $10 million benefit in the second quarter 2008 related to a successful legal settlement, year-to-date general and administrative expenses were $63 million, or 5.6% of year-to-date revenue.

SALES INCREASE IN ARIZONA, DECLINES IN ALL OTHER MARKETS

Third quarter net orders declined 29% from 2007 to 2008 after a 40% cancellation rate in the quarter, which was higher than the 27% and 29% rates in the first two quarters of 2008, and in line with 41% in the third quarter of 2007. Arizona sales increased 17% year over year, while the largest percentage declines in sales were experienced in Florida (-74%) and California (-53%).

"We've reported lesser sales declines in the last several quarters than many other homebuilders. However, consistent with what others have reported, we saw a substantial decrease in traffic and sales during September, which has continued in October. Our September net sales were about 30% lower than the July-August pace, and our cancellation rate jumped to 45% that month in the wake of September's crisis in the financial markets," said Mr. Hilton.

He added, "Texas housing markets have been among the strongest through this downturn, due to the state's strong population and employment growth. While orders there had already come down about 30% from the peak in 2006, Hurricane Ike further reduced sales, construction and closings in Houston, our largest market. That, combined with the overall impact of the financial crisis, contributed to a third quarter sales decline of 28% from last year, resulting in a 16% decline year-to-date in Texas."

FOCUSED ON MAINTAINING BALANCE SHEET STRENGTH

Despite being a build-to-order homebuilder, cancellations resulted in a sequential increase of Meritage's inventory of unsold homes, which rose to 809 as of September 30, 2008, from 725 the previous quarter, yet were 34% lower than September 30, 2007.

The Company ended the quarter with $119 million in cash, no bank debt and $338 million available under the terms of its credit facility. Delayed closings and higher inventory levels reduced net cash flow in the third quarter. Despite that, Meritage was modestly cash flow positive for the quarter, and has generated more than $106 million positive cash flow from operations in the first three quarters of 2008.

Meritage's net debt-to-capital ratio was 46% at September 30, 2008, compared to 41% at the end of the previous quarter and 50% at September 30, 2007. The increase this quarter was due to a reduction in shareholders' equity from the net loss, driven primarily by the deferred tax valuation allowance and real estate impairments. Meritage was in compliance with all covenants under its amended credit facility as of September 30, 2008.

The total of 20,738 lots controlled at September 30, 2008, was 62% lower than its peak three years earlier, and down from 21,902 at June 30, 2008. Consistent with management's strategy to reduce risks associated with owning long land positions in depreciating markets, the Company's 1.4-year supply of owned lots (based on trailing twelve months' closings) is one of the lowest in the homebuilding industry.

SUMMARY AND FUTURE OUTLOOK

Mr. Hilton concluded, "We believe that true demand for homes is being depressed by the volatility in the financial markets and the constant barrage of negative news. It appears that this has caused many buyers to defer home purchases until prices and economic conditions stabilize. A few markets such as Sacramento have shown sales increases recently, as buyers have taken advantage of the large selection and lower prices on homes, and brought down inventories despite additional foreclosures. However, those isolated bright spots may not be indicative of the market in general, so we are emphasizing a more defensive strategy going forward.

"We will focus our efforts on reducing Meritage's inventory of unsold homes, reducing construction costs and overhead expenses, generating cash and protecting our balance sheet. We'll be very cautious in acquiring any new lot positions.

"Despite lower sales and current market conditions, we expect to generate positive cash flow for the next several quarters from our continued reduction of inventory and projected collection of roughly $80 million in tax refunds in the first half of 2009.

"We are hopeful that the actions being taken by the federal government and other international leaders will restore faith in the credit markets, ease liquidity and stem the tide of foreclosures. We will continue to focus on protecting our balance sheet, and we believe that we are in markets that will offer some of the best long-term opportunities for homebuilders."

CONFERENCE CALL AND WEBCAST

The Company will host a conference call to discuss these results on October 28, 2008, at 11:00 a.m. Eastern Time. The call will be webcast by B2i Technologies, with an accompanying slideshow on the "Investor Relations" page of the Company's web site at http://www.meritagehomes.com. For telephone participants, the dial-in number is 888-241-0558 with a passcode of "Meritage". Participants are encouraged to dial in five minutes before the call begins. A replay of the call will be available after 4:00 p.m. EDT October 28, 2008, through midnight November 28, 2008 on the websites noted above, or by dialing 800-374-8789, and referencing passcode 64825132.



             Meritage Homes Corporation and Subsidiaries
                          Operating Results
                             (Unaudited)
                (In thousands, except per share data)

                           Three Months Ended      Nine Months Ended
                              September 30,          September 30,
                            2008        2007       2008        2007
                            ----        ----       ----        ----
 Operating results
 Home closing revenue     $ 372,907  $ 574,667  $1,118,486  $1,718,530
 Land closing revenue         1,859      3,902       5,007       6,156
                          ---------  ---------  ----------  ----------
  Total closing revenue     374,766    578,569   1,123,493   1,724,686
 Home closing gross
  profit/(loss)               6,786    (62,283)     31,135      37,456
 Land closing loss          (13,050)      (759)    (19,616)       (399)
                          ---------  ---------  ----------  ----------
  Total closing gross
   (loss)/profit             (6,264)   (63,042)     11,519      37,057

 Commissions and other
  sales costs               (33,840)   (49,598)   (101,274)   (145,003)
 General and
  administrative
  expenses(1)               (20,735)   (21,308)    (52,481)    (76,385)
 Goodwill-related
  impairments                    --    (45,000)         --     (72,952)
 Interest expense            (5,835)    (2,319)    (17,034)     (2,638)
 Other income/(loss),
  net(2)                      5,092    (11,150)     (7,256)        918
                          ---------  ---------  ----------  ----------
 Loss before income taxes   (61,582)  (192,417)   (166,526)   (259,003)
 (Provision)/benefit for
  income taxes              (82,431)    73,865     (46,260)     98,991
                          ---------  ---------  ----------  ----------
 Net loss                 $(144,013) $(118,552) $ (212,786) $ (160,012)
                          =========  =========  ==========  ==========

 Loss per share
 Basic and Diluted:
   Loss per share         $   (4.69) $   (4.52) $    (7.37) $    (6.10)
   Weighted average shares
    outstanding              30,690     26,249      28,872      26,216

 Non-GAAP Reconciliations:
 Total closing gross
  (loss)/profit              (6,264)   (63,042)     11,519      37,057
 Add: Real estate-related
  impairments
   Terminated lot options
    & land held for sale     19,342     48,565      44,939      84,684
   Impaired projects         34,670     99,820      88,564     159,600
                          ---------  ---------  ----------  ----------
 Adjusted closing gross
  profit                  $  47,748  $  85,343  $  145,022  $  281,341
                          =========  =========  ==========  ==========

 Loss before income
  taxes                   $ (61,582) $(192,417) $ (166,526) $ (259,003)
 Add: Real estate-related
  and JV impairments
   Terminated lot options
    and land sales           19,342     48,565      44,939      84,684
   Impaired projects         34,670     99,820      88,564     159,600
   Joint venture (JV)
    impairments               1,070     23,369      20,759      24,489
 Goodwill-related
  impairments                    --     45,000          --      72,952
                          ---------  ---------  ----------  ----------
 Adjusted (loss)/earnings
  before income taxes     $  (6,500) $  24,337  $  (12,264) $   82,722
                          =========  =========  ==========  ==========

 (1) General and administrative expenses for the nine months ended
     September 30, 2008 include a $10.2 million benefit related to a
     successful legal settlement.

 (2) Other income is net of the Joint Venture (JV) impairments shown
     in the "Non-GAAP reconciliations" section.


             Meritage Homes Corporation and Subsidiaries
                   Non-GAAP Financial Disclosures
                             (Unaudited)
                       (Dollars in thousands)

                             Three Months Ended     Nine Months Ended
                                September 30,         September 30,
                              2008        2007      2008        2007
                              ----        ----      ----        ----
 EBITDA reconciliation:(1)
 Net loss                   $(144,013) $(118,552) $(212,786) $(160,012)
 (Benefit)/provision for
  income taxes                 82,431    (73,865)    46,260    (98,991)
 Interest amortized to cost
  of sales & interest
  expense                      13,068     14,920     40,836     33,058
 Depreciation and
  amortization                  3,221      4,412      9,785     13,456
                            ---------  ---------  ---------  ---------
 EBITDA                     $ (45,293) $(173,085) $(115,905) $(212,489)
 Add back:
 Real estate-related
  impairments                  55,082    171,754    154,262    268,773
 Fixed asset impairments           --         --         --         --
 Goodwill-related
  impairments                      --     45,000         --     72,952
                            ---------  ---------  ---------  ---------
 Adjusted EBITDA            $   9,789  $  43,669  $  38,357  $ 129,236
                            =========  =========  =========  =========

                                                As of and for the Four
                                                    Quarters Ended
                                                     September 30,
                                                   2008        2007
                                                   ----        ----
 EBITDA reconciliation:(1)
 Net loss                                       $ (341,625) $ (150,988)
 (Benefit)/provision for income taxes              (22,380)    (94,394)
 Interest amortized to cost of sales & interest
  expense                                           59,185      43,257
 Depreciation and
  amortization                                      14,147      21,913
                                                ----------  ----------
 EBITDA                                         $ (290,673) $ (180,212)
 Add back:
 Real estate-related impairments                   283,787     331,438
 Fixed asset impairments                             3,124          --
 Goodwill-related impairments                       57,538      72,952
                                                ----------  ----------
 Adjusted EBITDA                                $   53,776  $  224,178
                                                ==========  ==========

 Interest coverage ratio:(2)
 Adjusted EBITDA                                $   53,776  $  224,178
 Interest incurred                                  52,648      61,109
 Interest coverage ratio                               1.0         3.7

 Net debt-to-capital:(3)
 Notes payable and other borrowings             $  629,718  $  883,927
 Less:  cash and cash equivalents               $ (119,027) $  (45,297)
                                                ----------  ----------
 Net debt                                          510,691     838,630
 Stockholders' equity                              604,891     852,898
                                                ----------  ----------
 Capital                                         1,115,582   1,691,528
 Net debt-to-capital                                  45.8%       49.6%

(1) EBITDA and adjusted EBITDA are non-GAAP financial measures
 representing net earnings before interest expense amortized to cost of
 sales, income taxes, depreciation and amortization, with write-offs
 and impairment charges also excluded from adjusted EBITDA. A non-GAAP
 financial measure is a numerical measure of a company's historical or
 future financial performance, financial position or cash flows that
 excludes amounts, or is subject to adjustments that have the effect of
 excluding amounts, that are included in the most directly comparable
 measure calculated and presented in accordance with GAAP in the
 statement of operations, balance sheet, or statement of cash flows (or
 equivalent statements) of the Company; or includes amounts, or is
 subject to adjustments that have the effect of including amounts, that
 are excluded from the most directly comparable measure so calculated
 and presented. In this regard, GAAP refers to generally accepted
 accounting principles in the United States. We have provided a
 reconciliation of these non-GAAP financial measures to the most
 directly comparable GAAP financial measure. EBITDA is presented here
 because it is used by management to analyze and compare Meritage with
 other homebuilding companies on the basis of operating performance and
 we believe it is a financial measure widely used by investors and
 analysts in the homebuilding industry. Adjusted EBITDA is presented
 because it more closely, although not exactly, resembles the
 comparable covenant calculations under our revolving credit facility
 and senior and senior subordinated note indentures. These measures as
 presented may not be comparable to similarly titled measures reported
 by other companies because not all companies calculate EBITDA in an
 identical manner and, therefore, it is not necessarily an accurate
 means of comparison between companies. EBITDA is not intended to
 represent cash flows for the period or funds available for
 management's discretionary use nor has it been presented as an
 alternative to operating income or as an indicator of operating
 performance and it should not be considered in isolation or as a
 substitute for measures of performance prepared in accordance with
 GAAP.

 (2) Interest coverage ratio is calculated as the trailing four
 quarters' Adjusted EBITDA divided by the trailing four quarters'
 interest incurred. This calculation may differ from our interest
 coverage ratio as computed for our credit facility covenant due to
 additional non-cash reconciling items, such as stock compensation.

 (3) Net debt-to-capital is calculated as notes payable and other
 borrowings less cash and cash equivalents, divided by the sum of notes
 payable and other borrowings, less cash and cash equivalents, plus
 stockholders' equity.


             Meritage Homes Corporation and Subsidiaries
                Condensed Consolidated Balance Sheets
                           (In thousands)
                             (Unaudited)

                                     Sept. 30,   Dec. 31,    Sept. 30,
                                       2008        2007        2007
 Assets:
  Cash and cash equivalents         $  119,027  $   27,677  $   45,297
  Income tax receivables                60,415      67,424      40,970
  Other receivables                     38,010      56,079      52,603
  Real estate(1)                     1,049,530   1,267,879   1,504,137
  Investments in unconsolidated
   entities                             20,788      26,563      57,387
  Deferred tax asset, net               31,336     139,057     110,390
  Option deposits                       69,032      87,191     106,768
  Other assets                          65,606      76,511     157,916
                                    ----------  ----------  ----------
   Total assets                     $1,453,744  $1,748,381  $2,075,468
                                    ==========  ==========  ==========

 Liabilities:
  Senior notes                         478,926     478,802     478,760
  Senior subordinated notes            150,000     150,000     150,000
  Credit facility                           --      82,000     234,500
  Other borrowings                         792      19,073      20,667
  Accounts payable, accrued
   liabilities, homebuyer deposits,
   and other liabilities               219,135     288,342     338,643
                                    ----------  ----------  ----------
   Total liabilities                   848,853   1,018,217   1,222,570
                                    ----------  ----------  ----------
   Total equity                        604,891     730,164     852,898
                                    ----------  ----------  ----------
   Total liabilities & equity       $1,453,744  $1,748,381  $2,075,468
                                    ==========  ==========  ==========

 (1) Real estate consists of the
      following:
      Homes under contract under
       construction                 $  316,834  $  327,416  $  535,405
      Finished homesites/under
       development                     499,470     596,752     624,098
      Unsold homes, completed and
       under construction              149,992     236,099     255,334
      Model homes                       59,928      61,172      59,237
      Model home lease program             792      19,073      20,667
      Land held for development or
       sale                             22,514      27,367       9,396
                                    ----------  ----------  ----------
       Total real estate            $1,049,530  $1,267,879  $1,504,137
                                    ==========  ==========  ==========


             Meritage Homes Corporation and Subsidiaries
           Condensed Consolidated Statement of Cash Flows
                             (Unaudited)
                           (in thousands)

                                                   Nine Months Ended
                                                     September 30,
                                                   2008        2007
                                                   ----        ----

 Operating results

 Net loss                                       $ (212,786) $ (160,012)
 Real estate-related impairments                   133,503     244,284
 Goodwill-related impairments                           --      72,952
 Decrease/(increase) in deferred taxes               1,496     (81,424)
 Deferred tax valuation allowance                  106,225          --
 Equity in losses from JVs and
  distributions of JV earnings, net                 22,020      21,724
 Decrease/(increase) in real estate
  and deposits, net                                 95,818    (131,410)
 Other operating activities                        (40,124)   (128,047)
                                                ----------  ----------
 Net cash provided by/(used in)
  operating activities                             106,152    (161,933)
                                                ----------  ----------

 Cash used in investing activities                 (16,479)     (2,948)
                                                ----------  ----------

 Net (repayments)/ borrowings under
  Credit Facility                                  (82,000)      8,000
 Proceeds from issuance of senior
  subordinated notes, net                               --     144,572
 Proceeds from issuance of common
  stock, net                                        82,775          --
 Other financing activities                            902         896
                                                ----------  ----------

 Net cash provided by financing
  activities                                         1,677     153,468
                                                ----------  ----------

 Net increase/(decrease) in cash                    91,350     (11,413)
 Beginning cash and cash
  equivalents                                       27,677      56,710
                                                ----------  ----------
 Ending cash and cash equivalents               $  119,027  $   45,297
                                                ==========  ==========


             Meritage Homes Corporation and Subsidiaries
                     Operating Data (Unaudited)
                       (Dollars in Thousands)

                                        For the Three Months Ended
                                              September 30,
                                          2008              2007
                                    ----------------  ----------------
                                    Homes    Value    Homes    Value
                                    -----    -----    -----    -----
 Homes Closed:
   California                         131  $  52,530    229  $ 104,989
   Nevada                              71     19,057     71     24,817
                                    -----  ---------  -----  ---------
  West Region                         202     71,587    300    129,806

   Arizona                            297     75,226    373    119,600
   Texas                              783    186,023  1,038    263,504
   Colorado                            37     13,342     64     22,669
                                    -----  ---------  -----  ---------
  Central Region                    1,117    274,591  1,475    405,773

   Florida                            104     26,729    119     39,088
                                    -----  ---------  -----  ---------
  East Region                         104     26,729    119     39,088
                                    -----  ---------  -----  ---------


   Total                            1,423  $ 372,907  1,894  $ 574,667
                                    =====  =========  =====  =========

 Homes Ordered:
   California                          85  $  32,768    180  $  72,641
   Nevada                              41     11,780     51     13,629
                                    -----  ---------  -----  ---------
  West Region                         126     44,548    231     86,270

   Arizona                            220     49,314    188     46,366
   Texas                              609    145,463    850    209,708
   Colorado                            25      7,943     41     13,408
                                    -----  ---------  -----  ---------
  Central Region                      854    202,720  1,079    269,482

   Florida                             33      7,113    125     34,614
                                    -----  ---------  -----  ---------
  East Region                          33      7,113    125     34,614
                                    -----  ---------  -----  ---------

   Total                            1,013  $ 254,381  1,435  $ 390,366
                                    =====  =========  =====  =========


             Meritage Homes Corporation and Subsidiaries
                     Operating Data (Unaudited)
                       (Dollars in Thousands)

                                  As of and For the Nine Months Ended
                                             September 30,
                                       2008                2007
                                --------------------------------------
                                Homes     Value     Homes     Value
                                -----     -----     -----     -----

 Homes Closed:
   California                     456  $   187,357    631  $   306,380
   Nevada                         205       55,174    174       61,743
                                -----  -----------  -----  -----------
  West Region                     661      242,531    805      368,123

   Arizona                        772      205,094  1,229      422,624
   Texas                        2,311      560,634  3,024      759,592
   Colorado                       101       35,323    125       46,142
                                -----  -----------  -----  -----------
  Central Region                3,184      801,051  4,378    1,228,358

   Florida                        294       74,904    365      122,049
                                -----  -----------  -----  -----------
  East Region                     294       74,904    365      122,049
                                -----  -----------  -----  -----------

   Total                        4,139  $ 1,118,486  5,548  $ 1,718,530
                                =====  ===========  =====  ===========

 Homes Ordered:
   California                     451  $   177,913    714  $   317,032
   Nevada                         193       50,833    205       69,264
                                -----  -----------  -----  -----------
  West Region                     644      228,746    919      386,296

   Arizona                        765      170,216  1,035      303,532
   Texas                        2,410      581,280  2,854      710,522
   Colorado                       102       35,493    145       52,377
                                -----  -----------  -----  -----------
  Central Region                3,277      786,989  4,034    1,066,431

   Florida                        199       45,659    289       79,721
                                -----  -----------  -----  -----------
  East Region                     199       45,659    289       79,721
                                -----  -----------  -----  -----------

   Total                        4,120  $ 1,061,394  5,242  $ 1,532,448
                                =====  ===========  =====  ===========

 Order Backlog:
   California                     159  $    72,088    309  $   140,468
   Nevada                          52       14,319     88       29,246
                                -----  -----------  -----  -----------
  West Region                     211       86,407    397      169,714

   Arizona                        383       85,680    711      228,214
   Texas                        1,571      404,997  2,039      533,093
   Colorado                        54       18,307     65       25,018
                                -----  -----------  -----  -----------
  Central Region                2,008      508,984  2,815      786,325

   Florida                         50       17,502    167       57,940
                                -----  -----------  -----  -----------
  East Region                      50       17,502    167       57,940
                                -----  -----------  -----  -----------

   Total                        2,269  $   612,893  3,379  $ 1,013,979
                                =====  ===========  =====  ===========

             Meritage Homes Corporation and Subsidiaries
                     Operating Data (Unaudited)

                         Year-to-date 2008           Year-to-date 2007
                         -----------------           -----------------
 Active                  Beg.          End           Beg.          End
 Communities:            ----          ---           ----          ---

  California               27           15             26           29
  Nevada                   11           12              5           11
                         ----         ----           ----         ----
  West Region              38           27             31           40

  Arizona                  36           30             42           37
  Texas                   127          132            121          124
  Colorado                  6            5              6            7
                         ----         ----           ----         ----
  Central Region          169          167            169          168

  Florida                  13           13             13           13
                         ----         ----           ----         ----
  East Region              13           13             13           13
                         ----         ----           ----         ----

      Total               220          207            213          221
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ABOUT MERITAGE HOMES CORPORATION

Meritage Homes Corporation (NYSE:MTH) builds primarily single-family homes across the southern and western United States under the Meritage, Monterey and Legacy brands. Meritage has active communities in Houston, Dallas/Ft. Worth, Austin, San Antonio, Phoenix/Scottsdale, Tucson, Las Vegas, the California East Bay/Central Valley and Inland Empire, Denver and Orlando. The Company was ranked by Builder magazine in 2007 as the 12th largest homebuilder in the U.S. and ranked #803 on the 2008 Fortune 1000 list. For more information about the Company, visit www.meritagehomes.com.

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This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include those regarding the Company's outlook for the homebuilding markets; future strategy and intention to reduce its inventory of unsold homes, construction costs and overhead expenses to protect its balance sheet; strategy with respect to new lot positions; and anticipation that it will generate positive cash flow and collect tax refunds. Such statements are based upon preliminary financial and operating data which are subject to finalization by management and review by our independent registered public accountants, as well as the current beliefs and expectations of Company management, and current market conditions, which are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The Company makes no commitment, and disclaims any duty, to update or revise any forward-looking statements to reflect future events or changes in these expectations.

Meritage's business is subject to a number of risks and uncertainties, including: weakness in the homebuilding market resulting from the current economic downturn; interest rates and changes in the availability and pricing of residential mortgages; housing affordability; fluctuations in demand, competition, sales orders, cancellation rates and home prices in our markets; potential write-downs or write-offs of assets, including pre-acquisition costs and deposits; investments in land and development joint ventures; the exposure to obligations under performance and surety bonds, performance guarantees and letters of credit; the cost and availability of insurance, including the unavailability of insurance for the presence of mold; the impact of construction defect and home warranty claims; our success in prevailing on contested tax positions and the impact of deferred tax valuation allowances; materials and labor costs; changes in the availability and pricing of real estate in the markets in which the Company operates; the ability to acquire additional land or options to acquire additional land on acceptable terms; general economic slow downs; dependence on key personnel and the availability of satisfactory subcontractors; the Company's lack of geographic diversification; inflation in the cost of materials used to construct homes; fluctuations in quarterly operating results; the Company's financial leverage and level of indebtedness; our ability to take certain actions because of restrictions contained in the indentures for the Company's senior and senior subordinated notes and the agreement for the unsecured credit facility and our ability to raise additional capital when and if needed; success in locating and negotiating potential acquisitions; successful integration of acquired operations with existing operations; legislative or other initiatives that seek to restrain growth or new housing construction or similar measures; consumer confidence, which can be impacted by economic and other factors such as terrorism, war, or threats thereof and changes in energy prices or stock markets; our potential exposure to natural disasters; and other factors identified in documents filed by the Company with the Securities and Exchange Commission, including those set forth in our Form 10-K for the year ended December 31, 2007, and our most recent Form 10-Q, under the caption "Risk Factors." As a result of these and other factors, the Company's stock and note prices may fluctuate dramatically.

CONTACT:  Meritage Homes Corporation
          Investor Relations:
          Brent Anderson, Vice President-Investor Relations
            (972) 543-8207
          Corporate Communications:
          Jane Hays, Vice President-Corporate Communications
            (972) 543-8123