What happened

Shares of Meritage Homes (MTH -0.02%) were soaring over 11% in afternoon trading Thursday after the homebuilder reported first-quarter earnings showing profits surged 88% from the year-ago period.

So what

Demand for housing continues unabated, and the Federal Reserve's comments earlier this week that it intends to keep interest rates at near 0% ensures there shouldn't be any let up for some time to come.

New home being built

Image source: Getty Images.

Meritage reported the number of homes closed during the quarter jumped 25%, rising to 2,890 homes. It also has a sufficient backlog of inventory going forward with over 5,200 units available for sale, up 47% from last year.

Executive Chairman Steven Hilton said, "2021 is off to a solid start with robust demand that never really slowed down from an exceptional 2020."

Now what

Meritage Homes' stock has nearly doubled over the past year, and with some industry analysts forecasting the momentum in the housing market lasting as long as another three or four years, the potential for this homebuilder to construct additional earnings gains seems high.