Last quarter, Meritage Homes said something out loud that a lot of builders have been dancing around for a while. Their Q2 2026 earnings call made it pretty plain: they’re shifting weight toward the move-up buyer. Not abandoning the affordable end entirely, but clearly repositioning. When a company that’s been one of the loudest voices in the entry-level space starts talking about higher ASPs — average selling prices, in builder-speak — and larger square footage mixes, that’s worth paying attention to if you’re buying or selling anywhere in their footprint.

And in Texas, their footprint is substantial.

What Meritage Actually Said (In Plain Language)

I’m not an analyst and I’m not going to pretend I parse 10-Qs for fun, but the headline numbers from Q2 2026 weren’t subtle. Their average closing price ticked up somewhere around five to seven percent compared to the same quarter last year, and the commentary from leadership pointed directly at a conscious product mix shift. More homes in the $450,000–$600,000 range. Fewer bare-bones, sub-$350,000 starts.

The language they used was about “buyer quality” and “margin protection.” What that actually means on the ground is they’re building where the buyer has more equity, more income stability, and — critically — less rate sensitivity. Entry-level buyers getting squeezed at 7-ish percent rates are walking away from contracts. Move-up buyers who already own something, who have equity to roll forward, are still closing.

That’s a real distinction, and Meritage is responding to it.

What This Looks Like in DFW Right Now

If you’ve been watching new construction around Northlake, Celina, or out toward Aledo — which I’ve written about before because DFW’s next suburban growth wave is forming west of Fort Worth — you may have already noticed the product shifting in some of those communities. The smaller, tighter floor plans that were sitting on spec lots six months ago are getting replaced by homes with bigger primary suites, three-car garages, and media rooms. Not McMansions, but clearly aimed at a household that’s already owned once and knows what they want the second time around.

I drove through a Meritage community off Hwy 380 in Denton County a few weeks back. The model home they’re anchoring the community around now is somewhere around 2,600 square feet, priced give or take $480,000 at base. A year ago, the lead model in a comparable community would’ve opened closer to $380,000. That’s not inflation alone. That’s a product decision.

Days on market for their new inventory in that range has been running tighter than the entry-level stuff, from what I’ve seen — closer to 30–45 days versus some of the sub-$350,000 specs that have been sitting 60, 70, 90 days.

What This Means for Existing Homeowners Thinking About Trading Up

Here’s the part that actually matters if you own something in the $300,000–$400,000 range and you’ve been sitting on the sideline waiting for rates to drop before you made a move.

Meritage chasing this buyer pool means there’s more well-built, properly permitted new construction competing for the same move-up household you are. That’s not automatically bad — competition is normal — but it does mean the negotiating dynamic has shifted a little. Builders can offer rate buydowns, incentives on closing costs, and design upgrades that a resale seller simply can’t match. As of recent months, some DFW Meritage communities were offering rate buydowns that effectively got buyers into the low-to-mid 5s on a temporary basis. That’s a real pull.

If you’re selling a home to fund that move-up purchase, think hard about your timing. The move-up resale inventory in that $350,000–$500,000 band has been reasonably thin, which works in your favor as a seller. But if your target on the buy side is new construction, you’ll want to understand what incentives the builder is packaging — and whether they require you to use their preferred lender, which sometimes comes with strings.

A few things worth keeping in mind if you’re entering this part of the market:

  • Builder incentives are often tied to closing in a specific quarter — Meritage had end-of-quarter pushes in Q2 that moved inventory fast
  • “Base price” in a new community rarely reflects what you’ll actually pay once lot premiums and design center upgrades get added in
  • Warranty terms on new construction vary; ask specifically about the structural warranty versus the cosmetic one
  • Your option period rights on a new build contract are different from resale — understanding your inspection rights before you sign anything matters more than people realize
  • If you’re in a community that’s still in Phase 1, your home may be surrounded by construction for two or three years

The Affordability Wrinkle Nobody’s Talking About

Here’s what bugs me a little about this pivot, and I don’t think I’m alone in noticing it.

When a major builder like Meritage moves up-market, that entry-level supply gap doesn’t fill itself. In DFW, housing affordability was already slipping even when builders were reporting strength at the higher end. If the big nationals all chase the same move-up buyer simultaneously — and there are signs that more than just Meritage is doing this — first-time buyers and lower-income households get squeezed harder on the new construction side. That pushes more of them toward older resale inventory, which has its own issues, or toward outer-ring suburbs where the land is cheaper but the commute cost is real.

It’s a cycle worth watching if you care about more than just your own transaction.

What to Actually Do With This Information

If you’re a move-up buyer, probably in the $425,000–$575,000 range, and you’ve been eyeing new construction in the northern DFW suburbs or anywhere Meritage has active communities: now is a reasonable time to visit a model and ask flat out what the Q3 incentive package looks like. Builders are more motivated to deal when they’re trying to hit quarterly close numbers, and Q3 ends September 30.

If you’re a first-time buyer in that sub-$350,000 window, new construction from the big nationals is increasingly not your friend in this market. That doesn’t mean new construction is off the table — smaller regional builders are still working that price point in some areas — but you may need to look harder and in less obvious places. The most overlooked sources of homes for first-time buyers are often not where the builder billboards are pointing you.

Either way, what Meritage’s Q2 numbers tell you is that the market is sorting itself. Know which half you’re in before you start touring.