Meritage June sales less robust than May

NEW YORK (Reuters) - Meritage Homes Corp (MTH.N), the No. 10 U.S. home builder, has seen slower sales in June compared to April and May, but remains hopeful it can return to profitability in 2010, its chief executive said on Tuesday.

After May delivered its best sales in 11 months, June was probably not as good, Chairman and CEO Steven Hilton told the Reuters Global Real Estate Summit.

"Sales have not been as robust in the last few weeks as they were in April and May, although we still see a lot of positive signs," Hilton said.

"May was our best selling month in 11 months." He added that demand typically drops off in mid-June in the states where Meritage operates.

Meritage, which sells homes in 12 markets in Florida and southwestern U.S. markets like Phoenix, Las Vegas and Sacramento, is confident it can grow market share in Texas, its biggest market, Hilton said.

The company has shifted to smaller, entry-level homes to appeal to more price-conscious first-time homebuyers. Its smallest house, at 1,100 square feet, sells for $95,000.

The number of home listings has started to decline, many buyers have "a sense of urgency," traffic is strong, and cancellation rates have stabilized more in line with their long-term average of 20 percent to 25 percent.

Lower raw material and labor costs, and cheaper land, mean the company can build a new home for as little as 50 percent of what it used to pay, he added.

(Reporting by Nick Zieminski, editing by Leslie Gevirtz)