Is Meritage Homes (MTH) the Best Housing Stock to Buy for 2026?

We recently published 10 Stocks Moving On Key Analyst Calls. Meritage Homes Corp (NYSE:MTH) is one of the stocks analysts were recently talking about.

John Lovallo, UBS homebuilders and building products analyst, said in a latest program on CNBC that Meritage Homes Corp (NYSE:MTH) is his top pick in the homebuilder space.

The analyst believes a bottom is in sight for housing stocks, and 2026 would be a positive year for the industry amid decreasing interest rates.

“We need is rate stabilization. These builders are having to put in an incredible amount of incentives into the market, which lowers ASP in order to stimulate demand. If rates stabilize, I think folks will have a better idea of what they’re paying. They’ll feel more confident in the overall environment. And let me tell you something, if rates actually do decline, that’s where it becomes very powerful. We’re modeling gross margins flat across the group in a stable rate environment. If rates come down, that is a meaningful spring to profitability,” he said.

Photo by Breno Assis on Unsplash

ClearBridge Small Cap Strategy stated the following regarding Meritage Homes Corporation (NYSE:MTH) in its Q3 2024 investor letter:

“Our largest new position during the quarter was Meritage Homes Corporation (NYSE:MTH), in the consumer discretionary sector, which builds single family attached and detached homes in the western and southeastern U.S. While higher mortgage rates have weighed on homebuilders and the demand for housing, we continue to believe that there is a systematic shortage of housing in the U.S., and that a decline in interest rates and subsequent mortgage rates should prove a boon to homebuilders. Beyond broader sector tailwinds, we opted to move our capital from Century Communities to Meritage given the latter’s higher historical level of returns at a comparable current valuation.”

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Disclosure: None. This article is originally published at Insider Monkey.