How Meritage Homes Corp. Is Improving 1 Metric, and It's Driving Profits Up

An important number for homebuilders is average home sales price, or ASP. One might think this number should go up over time. But when Meritage Homes Corp. (NYSE: MTH) reported third-quarter earnings on Oct. 27, and disclosed that the average sales price of homes that its customers ordered in the quarter had declined, that was actually a good thing. This was especially true since it corresponded with higher profit margins, more homes sold and ordered, and a double-digit increase in profits.

Let's take a closer look at Meritage's results, and at why its strategic plan to build more entry-level homes is starting to pay off.

Image source: Getty Images.

Source: Fool.com