What happened

Shares of home builder Meritage Homes (MTH -0.02%) were higher by 14% by noon EDT on July 29. They had risen as much as 14.7% in morning trading on Wall Street, so the stock was able to hold on to most of its early gains. The company's after-the-close earnings release on July 28 precipitated the strong and sustained advance.

So what

Meritage Homes had good news to report across the board. It closed on 3,273 homes in the second quarter of 2021 (the highest home-closing level in the company's history), up 18% from the same period last year. The average closing price of the homes was 4% higher as well. And that, in turn, led to a hefty 23% increase in home-closing revenue. Earnings per share (EPS) of $4.36 were an 83% increase from the $2.38 achieved in Q2 2020. These numbers were, understandably, met with a positive response by investors.

Two people looking at blueprints at a construction site.

Image source: Getty Images.

However, the good news doesn't stop there. Although the number of home orders the company received in Q2 was down 2% year over year, pricing was 18% higher. Plus, the dollar value of the orders it received was up 16%.

Meanwhile, the builder's backlog of 5,509 units was up 25%, with the dollar value of its backlog higher by 41%. That suggests the outlook remains very strong at Meritage Homes. Notably, the company continues to target having 300 communities up and running by mid-2022 but noted that it had exceeded its own expectations by hitting 226 in Q2. So the good news just keeps coming.

Now what

Meritage Homes is clearly benefiting from a strong housing market, so the positive quarterly results probably shouldn't have shocked anyone. With a strong backlog of work and the company's success in exceeding its own growth plans, there doesn't appear to be any reason to expect a serious performance drop off. Long-term investors have every right to be pleased with the company's performance this quarter.