Contacts: ARIZONA:                TEXAS:
          Larry Seay              Jane Hays                Joseph Kist
          Vice President/         Vice President Corp.     Broadgate Consultants
          Finance & CFO           Development              (212) 232-2222
          (602) 998-8700          (972) 612-8085



                       MONTEREY HOMES CHANGES COMPANY NAME
                             TO MERITAGE CORPORATION

- --------------------------------------------------------------------------------

PHOENIX,  Arizona  AND DALLAS,  Texas,  SEPTEMBER  16,  1998 --  Monterey  Homes
Corporation  (NYSE:  MTH) is pleased to announce that its new corporate name has
been overwhelmingly  approved at a Special  Shareholders'  Meeting held today in
Phoenix, Arizona.

Effective  today,  the Company  will be known as Meritage  Corporation,  and its
shares will continue to trade on the New York Stock  Exchange under its existing
ticker symbol of "MTH."

In reference  to the new  corporate  name,  John  Landon,  Managing  Director of
Meritage  Corporation,  said,  "We're  excited  about  our new  name and our new
identity.  The name comes from the  practice of  blending  fine  ingredients  to
create a  superior  result,  which we believe  is  representative  of what we've
accomplished by uniting the operations and resources of Monterey  Homes,  Legacy
Homes and, most recently,  Meritage Homes of Northern California (formerly known
as Sterling Communities) under one corporate structure."

Monterey  Homes  will  continue  to  be  the  brand  name  for  the  distinctive
semi-custom  luxury and  move-up  homebuilding  operations  in the  Phoenix  and
Tucson,  Arizona areas; and the move-up and entry-level home building operations
in the Dallas/Ft. Worth, Austin and Houston, Texas areas will continue under the
Legacy  Homes brand  name.  The Company  plans to  continue  its growth  through
strategic acquisition and select start-up opportunities.


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