SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q
                 _______________________________________________

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended November 30, 1997

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 0-14830

                         CONTINENTAL HOMES HOLDING CORP.

             (Exact name of registrant as specified in its charter)

               Delaware                                        86-0554624
     (State or other jurisdiction                            (IRS Employer
   of incorporation or organization)                      Identification No.)

  7001 N. Scottsdale Road, Suite 2050                            85253
         Scottsdale, Arizona                                   (Zip Code)
(Address of principal executive offices)

                                 (602) 483-0006
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                  YES    X                         NO
                      -------                         -------

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                                                       Outstanding at
        Class of Common Stock                         December 30, 1997
        ---------------------                         -----------------
           $.01 par value                                 6,863,686
________________________________________________________________________________
<PAGE>
                         CONTINENTAL HOMES HOLDING CORP.


                                    FORM 10-Q
                              FOR THE QUARTER ENDED
                                NOVEMBER 30, 1997


                                TABLE OF CONTENTS


PART I.        FINANCIAL INFORMATION                                      Page

  Item 1.  Financial Statements:
         Consolidated Balance Sheets as of November 30, 1997 and
           May 31, 1997..............................................       3

         Consolidated Statements of Income for the three and six 
           months ended November 30, 1997 and 1996...................       4

         Consolidated Statements of Cash Flows for the six months
           ended November 30, 1997 and 1996..........................       5

         Notes to unaudited Consolidated Financial Statements........       6

  Item 2.  Management's Discussion and Analysis of Financial 
              Condition and Results of Operations....................       8

PART II. OTHER INFORMATION

  Item 4.  Submission of matters to a vote of Security Holders.......      12

  Item 6.  Exhibits and Reports on Form 8-K..........................      12
                                       2
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                  November 30,    May 31,
                                                                      1997         1997
                                                                      ----         ----
                                                                       (In thousands)
<S>                                                                <C>          <C>      
ASSETS
Homebuilding:
      Cash and cash equivalents                                    $  27,012    $  23,759
      Receivables                                                     17,038       27,894
      Homes, lots and improvements in production                     428,098      392,540
      Property and equipment, net                                      3,963        3,656
      Prepaid expenses and other assets                               21,456       20,868
      Excess of cost over related net assets acquired                  8,905        9,565
      Deferred income tax asset                                        5,790        2,471
                                                                   ---------    ---------
                                                                     512,262      480,753
                                                                   ---------    ---------
Mortgage banking:
      Mortgage loans held for sale                                    31,217       27,229
      Other assets                                                       946          274
                                                                   ---------    ---------
                                                                      32,163       27,503
                                                                   ---------    ---------
      Total assets                                                 $ 544,425    $ 508,256
                                                                   =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Homebuilding:
      Accounts payable and other liabilities                       $  59,807    $  62,163
      Notes payable, senior and convertible subordinated debt        294,357      270,763
                                                                   ---------    ---------
                                                                     354,164      332,926
                                                                   ---------    ---------
Mortgage banking:
       Notes payable                                                  16,279       15,662
       Other liabilities                                                 588          560
                                                                   ---------    ---------
                                                                      16,867       16,222
                                                                   ---------    ---------
       Total liabilities                                             371,031      349,148
                                                                   ---------    ---------

Minority interest                                                      3,755        4,209
                                                                   ---------    ---------
Commitments and contingencies

Stockholders' equity
       Preferred stock, $.01 par value:
         Authorized - 2,000,000 shares, Issued none                     --           --
       Common stock, $.01 par value:
         Authorized - 20,000,000 shares, Issued 7,081,531 shares          71           71
       Treasury stock, at cost - 217,845 and 228,320 shares           (2,887)      (2,973)
       Capital in excess of par value                                 60,963       60,878
       Retained earnings                                             111,492       96,923
                                                                   ---------    ---------
       Total stockholders' equity                                    169,639      154,899
                                                                   ---------    ---------
       Total liabilities and stockholders' equity                  $ 544,425    $ 508,256
                                                                   =========    =========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these unaudited consolidated balance sheets.
                                       3
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                   Three months ended               Six months ended
                                                      November  30,                   November 30,
                                                      -------------                   ------------
                                                  1997            1996            1997            1996
                                                  ----            ----            ----            ----
<S>                                           <C>             <C>             <C>             <C>        
REVENUES
     Home sales                               $   185,197     $   162,883     $   370,634     $   346,547
     Land sales                                       296          14,643           2,266          15,124
     Mortgage banking and title operations          3,441           2,564           6,798           5,830
     Other income (loss), net                        (411)           (108)           (835)             17
                                              -----------     -----------     -----------     -----------
         Total revenues                           188,523         179,982         378,863         367,518
                                              -----------     -----------     -----------     -----------

COSTS AND EXPENSES
Homebuilding:
     Cost of home sales                           152,716         132,976         306,126         282,650
     Cost of land sales                               316          13,996           2,316          14,492
     Selling, general and administrative
       expenses                                    19,451          17,005          38,523          35,645
     Interest, net                                    725           1,361           1,456           2,746
     Minority interest                               (121)           (192)           (454)           (302)
Mortgage banking and title operations:
     Selling, general and administrative
       expenses                                     2,539           2,082           4,987           4,138
     Interest, net                                   (164)           (198)           (374)           (399)
                                              -----------     -----------     -----------     -----------
         Total costs and expenses                 175,462         167,030         352,580         338,970
                                              -----------     -----------     -----------     -----------

Income before income taxes
  and extraordinary loss                           13,061          12,952          26,283          28,548
Income taxes                                        5,303           5,160          10,706          11,520
                                              -----------     -----------     -----------     -----------

Income from operations                              7,758           7,792          15,577          17,028

Extraordinary loss:
     Loss on extinguishment of debt
       net of income taxes of $233                   --              --              (322)           --
                                              -----------     -----------     -----------     -----------

Net income                                    $     7,758     $     7,792     $    15,255     $    17,028
                                              ===========     ===========     ===========     ===========

Earnings per common share                     $      1.13     $      1.12     $      2.22     $      2.44

Earnings per common share assuming
         full dilution                        $       .81     $       .81     $      1.60     $      1.76

Cash dividends per share                      $       .05     $       .05     $       .10     $       .10

Weighted average number of shares
         outstanding                            6,861,529       6,978,297       6,857,556       6,990,820
                                              ===========     ===========     ===========     ===========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these unaudited consolidated statements.
                                       4
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                                           Six  months ended
                                                              November 30,
                                                              ------------
                                                           1997          1996
                                                           ----          ----
                                                             (In thousands)
Cash flows from operating activities:
     Net income                                          $ 15,255      $ 17,028
         Adjustments to reconcile net income to net
         cash used by operating activities:
              Depreciation and amortization                 1,550         1,641
              Minority Interest                              (454)         (302)
              Deferred income taxes                        (3,319)          385
Decrease (increase) in assets
     Homes, lots and improvements in production           (35,558)      (52,552)
     Receivables                                            6,868           816
     Prepaid expenses and other assets                     (1,504)       (2,393)
Increase (decrease) in liabilities
     Accounts payable and other liabilities                (2,328)       10,358
                                                         --------      --------
Net cash used by operating activities                     (19,490)      (25,019)
                                                         --------      --------

Cash flows from investing activities:
     Net additions of property and equipment                 (869)       (1,750)
     Cash paid for acquisitions, net of cash acquired        --          (1,205)
     Adjustment to purchase price                            --           1,700
                                                         --------      --------
     Net cash used by investing activities                   (869)       (1,255)
                                                         --------      --------

Cash flows from financing activities:
     Increase in notes payable to financial
         institutions                                      35,684        25,008
     Retirement of bonds payable                             --            (168)
     Retirement of 12% Senior Notes                       (11,557)         --
     Stock options exercised                                  171           232
     Repurchase of stock                                     --          (1,922)
     Dividends paid                                          (686)         (698)
                                                         --------      --------
     Net cash provided by financing activities             23,612        22,452
                                                         --------      --------
     Net increase (decrease) in cash                        3,253        (3,822)
     Cash at beginning of period                           23,759        25,236
                                                         --------      --------
     Cash at end of period                               $ 27,012      $ 21,414
                                                         ========      ========

Supplemental  disclosures of cash flow information:
     Cash paid during the period for:
     Interest, net of amounts capitalized                $  2,970      $  3,245
     Income taxes                                        $ 10,257      $  9,097

The accompanying notes to consolidated financial statements are an integral part
of these unaudited consolidated statements.
                                       5
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note 1.       Basis of Presentation

              The  consolidated  financial  statements  include the  accounts of
              Continental   Homes  Holding  Corp.  and  its  subsidiaries   (the
              "Company").  In the  opinion  of  the  Company,  the  accompanying
              unaudited    consolidated   financial   statements   contain   all
              adjustments  (consisting  of only  normal  recurring  adjustments)
              necessary  to present  fairly the  Company's  financial  position,
              results of operations and cash flows for the periods presented.

              These  consolidated   financial   statements  should  be  read  in
              conjunction  with the  consolidated  financial  statements and the
              related  disclosures  contained in the Company's  annual report on
              Form  10-K  for the  year  ended  May 31,  1997,  filed  with  the
              Securities and Exchange Commission.

              The  results  of  operations  for the three and six  months  ended
              November 30, 1997 are not necessarily indicative of the results to
              be expected for the full year.

Note 2.       Interest Capitalization

              The  Company  follows  the  practice  of   capitalizing   for  its
              homebuilding  operations  certain  interest costs incurred on land
              under development and homes under  construction.  Such capitalized
              interest  is  included  in cost of home  sales  when the units are
              delivered.  The Company capitalized such interest in the amount of
              $11,138,000  and $9,223,000 and expensed as a component of cost of
              home sales  $8,838,000  and  $8,892,000  in the six  months  ended
              November 30, 1997 and 1996, respectively.

Note 3.       Notes payable, Senior and Convertible Subordinated Debt

         Notes   payable,   senior  and   convertible   subordinated   debt  for
homebuilding consist of:

<TABLE>
<CAPTION>
                                                                     November 30,      May 31,
                                                                         1997           1997
                                                                         ----           ----
                                                                            (In thousands)
<S>                                                                    <C>            <C>     
Notes payable                                                          $ 59,629       $ 24,547
10% senior notes, due 2006, net of discount of $1,507 and $1,599        148,493        148,401
12% senior notes, due 1999, net of premium of $65                          --           11,565
6-7/8% convertible subordinated notes, due 2002                          86,235         86,250
                                                                       --------       --------
                                                                       $294,357       $270,763
                                                                       ========       ========
</TABLE>
                                       6
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

Note 4.       Interest, net

         The summary of the components of interest, net is as follows:

                                   Three months ended        Six months ended
                                      November 30,              November 30,
                                      ------------              ------------
                                   1997         1996         1997         1996
                                   ----         ----         ----         ----
Homebuilding:                                    (In thousands)
         Interest expense        $ 1,162      $ 1,519      $ 2,385      $ 2,985
         Interest income            (437)        (158)        (929)        (239)
                                 -------      -------      -------      -------
                                 $   725      $ 1,361      $ 1,456      $ 2,746
                                 =======      =======      =======      =======

Mortgage Banking:
         Interest expense        $   332      $    83      $   585      $   260
         Interest income            (496)        (281)        (959)        (659)
                                 -------      -------      -------      -------
                                 $  (164)     $  (198)     $  (374)     $  (399)
                                 =======      =======      =======      =======

Note 5.       Statement of Financial Accounting Standards

         In  March  1997,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards  No. 128 (SFAS 128),  Earnings Per
Share,  which  supersedes  Accounting  Principal  Board Opinion 15, the existing
authoritative  guidance. SFAS 128 is effective for financial statements for both
interim  and  annual  periods  ending  after  December  15,  1997  and  requires
restatement of all prior-period EPS data presented.  The new statement  modifies
the  calculations  of primary and fully diluted EPS and replaces them with basic
and diluted EPS. The Company has  determined  that adoption of SFAS 128 will not
have a material impact on its previous or current reported EPS data.

Note 6.       Subsequent Event

         In December 1997, the Company  entered into a definitive  agreement and
plan of merger with D.R. Horton,  Inc.  ("Horton") pursuant to which the Company
would  be  merged  into  Horton.  The  merger  is  subject  to the  approval  of
stockholders of both companies,  various pre-merger  regulatory  approvals,  and
other  customary  closing  conditions and is expected to close late in the first
calendar quarter of 1998.
                                       7
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
                                     ITEM 2.
                                     -------
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

Results of Operations
---------------------
    Homebuilding
    ------------

         The  following  table  sets  forth,  for the  periods  indicated,  unit
activity, average sales price and revenue from home sales for the Company:

<TABLE>
<CAPTION>
                                                  Quarters ended                 Six months ended
                                                   November 30,                    November 30,
                                                   ------------                    ------------
                                               1997           1996             1997           1996
                                               ----           ----             ----           ----
<S>                                         <C>            <C>              <C>            <C>       
Units delivered                                  1,383          1,145            2,763          2,513
Average sales price                         $  133,910     $  142,256       $  134,142     $  137,902
Revenue from home sales (000's)             $  185,197     $  162,883       $  370,634     $  346,547
Percentage increase from prior year               13.7%          20.3%             7.0%          29.1%
Change due to volume                              20.8%          11.4%             9.9%          22.2%
Change due to average sales price                 (7.1%)          8.9%            (2.9%)          6.9%
</TABLE>                                                            

         The volume  increase in the quarter and six months  ended  November 30,
1997  compared to the same periods  during  fiscal 1997  resulted  from improved
deliveries in Phoenix, Southern California, San Antonio and Dallas. The decrease
in average  sales price in the quarter and six months  ended  November  30, 1997
compared to the same  periods  during  fiscal  1997  resulted  primarily  from a
decrease in average sales price in Phoenix, Denver, Southern California,  Dallas
and South  Florida due to product  mix and a decrease in average  sales price in
Austin due to competitive pricing pressures.

         The following  table  summarizes  information  related to the Company's
backlog at the dates indicated:
                                                   November 30,
                                                   ------------
                                              (Dollars in thousands)
                                          1997                      1996
                                          ----                      ----
                                    Units      Dollars        Units      Dollars
                                    -----      -------        -----      -------
Phoenix                               794     $102,779          714     $ 95,850
Texas                                 643       71,012          492       53,523
South Florida                         329       44,654          176       21,555
Denver                                236       42,771          230       44,522
Southern California                   159       42,651           72       24,630
                                 --------     --------     --------     --------
         Total backlog              2,161     $303,867        1,684     $240,080
                                 ========     ========     ========     ========

Average price per unit                            $141                      $143
                                                  ====                      ====

         The increase in backlog at November 30, 1997  resulted  from  increased
sales in all markets  during the first six months of fiscal 1998 compared to the
same period  during  fiscal 1997.  The  aggregate  sales value of new  contracts
signed  increased 44% in the six months ended November 30, 1997 to  $400,072,000
representing 2,909 homes as compared with $277,005,000  representing 2,048 homes
for the six months ended November 30, 1996.
                                       8
<PAGE>
         The  following  table  summarizes  information  related to cost of home
sales, selling,  general and administrative  ("SG&A") expenses and interest, net
for homebuilding:

<TABLE>
<CAPTION>
                             Quarters ended November 30,            Six months ended November 30,
                             ---------------------------            -----------------------------
                               1997                1996                1997                1996
                               ----                ----                ----                ----
                         Dollars      %      Dollars      %      Dollars      %      Dollars      %
                         -------      -      -------      -      -------      -      -------      -
<S>                     <C>        <C>      <C>        <C>      <C>        <C>      <C>        <C>   
Revenue from
  home sales            $185,197   100.0%   $162,883   100.0%   $370,634   100.0%   $346,547   100.0%
Cost of home sales       152,716    82.5     132,976    81.6     306,126    82.6     282,650    81.6
                        --------   -----    --------   -----    --------   -----    --------   -----
Gross profit from
  home sales              32,481    17.5      29,907    18.4      64,508    17.4      63,897    18.4
SG&A expenses             19,451    10.5      17,005    10.4      38,523    10.4      35,645    10.3
                        --------   -----    --------   -----    --------   -----    --------   -----
Operating income from
  homebuilding            13,030     7.0      12,902     8.0      25,985     7.0      28,252     8.1
Interest, net                725      .4       1,361      .9       1,456      .4       2,746      .8
                        --------   -----    --------   -----    --------   -----    --------   -----
Pre-tax profit from
  homebuilding          $ 12,305     6.6%   $ 11,541     7.1%   $ 24,529     6.6%   $ 25,506     7.3%
                        ========   =====    ========   =====    ========   =====    ========   =====
</TABLE>

         The decrease in gross profit margin from home sales for the quarter and
six months ended  November 30, 1997 was primarily due to a decline in margins in
all markets except Phoenix and San Antonio.  The increase in total SG&A expenses
for the quarter and six months ended  November 30, 1997  compared to the quarter
and six months ended  November  30, 1996 was  principally  due to the  increased
volume which increased variable marketing costs (sales commissions,  advertising
and model  furniture  amortization).  SG&A expenses for each home delivered were
$14,064 and $14,852 in the second quarter of fiscal 1998 and 1997,  respectively
and  $13,942  and  $14,184  in the  first six  months  of fiscal  1998 and 1997,
respectively.  The Company  capitalizes  certain SG&A expenses for homebuilding.
Accordingly,  total SG&A costs incurred for  homebuilding  were  $22,702,000 and
$44,842,000  for the three and six months ended  November  30, 1997  compared to
$19,996,000 and $41,321,000 for the corresponding fiscal 1997 period.

         The Company  capitalizes  certain  interest costs for its  homebuilding
operations and includes such capitalized interest in cost of home sales when the
related units are delivered. Accordingly, total interest incurred by the Company
was $6,676,000 and  $13,523,000  for the three and six months ended November 30,
1997,  respectively compared to $6,263,000 and $12,208,000 for the three and six
months ended  November 30,  1996,  respectively.  For the six month period ended
November 30, 1997,  interest,  net for homebuilding was $1,456,000 compared with
$2,746,000  for the six months ended November 30, 1996. The increase in interest
incurred  during the quarter and six months ended  November 30, 1997 compared to
the same periods  during fiscal 1997 was primarily due to an increase in debt as
a result of the 6% increase in inventory  from November 30, 1996 to November 30,
1997.  The decrease in interest,  net during the first six months of fiscal 1998
compared to the first six months of last year was due to the  capitalization  of
interest on the Company's  Carlsbad,  California project which began development
in October 1996, as well as additional interest income.

The Company's pre-tax profit from homebuilding for the six months ended November
30, 1997 was  $24,529,000  compared to  $25,506,000  for the  corresponding  six
months ended November 30, 1996.
                                       9
<PAGE>
         Mortgage Banking and Title Operations
         -------------------------------------

         The Company's  mortgage  banking  operations are conducted  through its
wholly-owned  subsidiary CH Mortgage Company ("CHMC"). The Company also conducts
title operations in Austin,  Texas through its wholly-owned  subsidiary,  Travis
County Title Company. The following table summarizes  operating  information for
the Company's mortgage banking and title operations:

<TABLE>
<CAPTION>
                                                    Quarters ended   Six months ended
                                                     November 30,      November 30,
                                                     ------------      ------------
                                                     1997     1996     1997     1996
                                                     ----     ----     ----     ----
                                                          (Dollars in thousands)
<S>                                                <C>      <C>      <C>      <C>   
Number of loans originated                            949      680    1,921    1,557

Loan origination fees                              $  975   $  636   $1,960   $1,480
Sale of servicing and marketing gains               1,679    1,221    3,018    2,695
Title policy premiums, net                            447      365      948      881
Other revenue                                         340      342      872      774
                                                   ------   ------   ------   ------
         Total revenues                             3,441    2,564    6,798    5,830
General and administrative expenses                 2,539    2,082    4,987    4,138
                                                   ------   ------   ------   ------
Operating income from mortgage banking and title      902      482    1,811    1,692
Interest, net                                         164      198      374      399
                                                   ------   ------   ------   ------
Pre-tax profit from mortgage banking and title     $1,066   $  680   $2,185   $2,091
                                                   ======   ======   ======   ======
</TABLE>

Revenues and general and administrative expenses from mortgage banking and title
operations  increased  in the quarter  and six months  ended  November  30, 1997
primarily as a result of a 40% and 23% increase in originations, respectively.

         Consolidated operations
         -----------------------

         Net income was $15,255,000  ($2.22 per share,  $1.60 fully diluted) for
the six months ended November 30, 1997 compared to $17,028,000 ($2.44 per share,
$1.76 fully diluted) for the period ended November 30, 1996.

Liquidity and Capital Resources
-------------------------------

         The Company's financing needs depend primarily upon sales volume, asset
turnover, land acquisition and inventory balances. The Company has financed, and
expects to  continue  to  finance,  its  working  capital  needs  through  funds
generated by operations and borrowings.  Funds for future land  acquisitions and
construction  costs are  expected  to be provided  primarily  by cash flows from
operations  and  future   borrowings  as  permitted  under  the  Company's  loan
agreements.  On June 27,  1996,  the  Company  entered  into a credit  agreement
("Credit  Agreement")  with a group of banks which  provides  for a $140 million
unsecured  revolving line of credit.  Borrowings under the Credit Agreement bear
interest at LIBOR plus 1.35% or prime plus .10% at the  Company's  election  and
subject to the rating on its senior debt.  Available borrowings under the Credit
Agreement  are limited to certain  percentages  of housing unit costs,  finished
lots, land under development and receivables as defined in the Credit Agreement.
As a result  of this  formula,  the  borrowing  base at  November  30,  1997 was
$137,713,000 and $49,000,000 was outstanding.  The Company believes that amounts
generated from  operations  and such  additional  borrowings  will provide funds
adequate  to finance  its  existing  homebuilding  activities  and meet its debt
service requirements.
                                       10
<PAGE>
         In order to provide funds for the origination of mortgage  loans,  CHMC
has a  warehouse  line of credit  for  $25,000,000  which is  guaranteed  by the
Company.  Pursuant to the warehouse line of credit, the Company issues drafts to
fund its  mortgage  loans.  The  amount  represented  by a draft is drawn on the
warehouse  line of credit when the draft is presented  for payment.  At November
30, 1997,  the amount  outstanding  under the  warehouse  line of credit and the
amount  of  funding   drafts  that  had  not  been  presented  for  payment  was
$16,279,000.  The Company believes that this line is sufficient for its mortgage
banking operations.

         On November 10, 1995,  the Company  completed  the sale of  $75,000,000
principal amount of its 6-7/8% Convertible Subordinated Notes due November 2002.
On December 5, 1995,  the Company sold an additional  $11,250,000 of such notes.
The  net  proceeds  were  used  to  redeem  the  Company's  6-7/8%   Convertible
Subordinated Notes due March 2002 and to reduce temporarily  outstanding amounts
under  certain  of the  Company's  revolving  lines  of  credit  (including  the
warehouse line of credit).  The Convertible  Notes are  immediately  convertible
into shares of the  Company's  common stock at a rate of 42.105  shares for each
$1,000 principal amount of Convertible Notes.

         On  April  18,  1996 the  Company  completed  the sale of  $130,000,000
principal  amount of its 10%  Senior  Notes due April  2006.  The  Company  used
approximately  $107,542,000  of  the  net  proceeds  to  repurchase  $98,500,000
aggregate  principal  amount of its 12%  Senior  Notes due 1999.  The  remaining
proceeds were used to reduce  temporarily  outstanding  amounts under certain of
the Company's revolving lines of credit. On January 30, 1997, the Company issued
an  additional  $20,000,000  principal  amount of its 10% Senior Notes due April
2006. The net proceeds were used to reduce temporarily outstanding amounts under
the Company's  revolving line of credit. On August 1, 1997, the Company redeemed
the remaining  $11,500,000  principal amount outstanding of its 12% Senior Notes
due August 1999, at a redemption price of 104%.

         Pursuant to a stock  repurchase plan approved by the Board of Directors
on December 22, 1994, the Company repurchased 162,000 shares of its common stock
during fiscal 1997 at an average price of $16.22.

Cautionary disclosure regarding forward-looking statements
----------------------------------------------------------

         The Company  desires to take advantage of the "safe harbor"  provisions
of the Private  Securities  Litigation  Reform Act of 1995 and is including this
disclosure  in order to do so.  Certain  statements  in this report that are not
historical  facts are, or may be considered to be,  forward-looking  statements.
Given the risks,  uncertainties and contingencies of the Company's business, the
actual  results may differ  materially  from those  expressed or implied by such
forward-looking  statements.  Further,  certain  forward-looking  statements are
based  on  assumptions  concerning  future  events  which  may not  prove  to be
accurate.

         Forward-looking   statements  by  the  Company   regarding  results  of
operations and, ultimately,  financial condition,  are subject to numerous risks
and  assumptions,  including  but not  limited to,  changes in general  economic
conditions, fluctuations in interest rates or labor and material costs, consumer
confidence,   competition,   government  regulations,   financing  availability,
geographic concentration and risks associated with new and future communities.
                                       11
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES

                                     PART II
                                OTHER INFORMATION

Item 3.       Legal Proceedings
              -----------------

         On December 11, 1997,  the Company was named a nominal  defendant,  and
         certain directors of the Company were named defendants,  in a purported
         class  action suit brought by Brickell  Partners  filed in the State of
         Delaware  alleging breach of fiduciary duty for failure to proceed with
         a merger  proposal by D.R.  Horton,  Inc.  The Company does not believe
         this  litigation  will have a material  adverse effect on its financial
         position or operating results.

Item 4.       Submission of matters to a vote of Security Holders
              ---------------------------------------------------

         None.

Item 6.       Exhibits and Reports on Form 8-K
              --------------------------------

         (a)    Exhibits

                10.3(b) Fourth  Modification  Agreement dated as of November 20,
                        1997 between BOAZ and CHMC.

                10.11   Second  Modification  Agreement  dated as of  October 9,
                        1997 between Bank One, Arizona, N.A. ("BOAZ"), The First
                        National Bank of Boston, Norwest Bank Arizona,  Guaranty
                        Federal Bank and the Company.

                10.12   Agreement  and Plan of Merger  dated as of December  18,
                        1997 between the Company and D.R. Horton, Inc.

                11      Statement of Computation of Earnings Per Share.

                27      Financial Data Schedule.

        (b)     Reports on Form 8-K: The Company filed reports on Form 8-K dated
                October 2, 1997 and December 18, 1997.
                                       12
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES

                                   SIGNATURES
                                   ----------


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                                 CONTINENTAL HOMES HOLDING CORP.


Date:  January 13, 1998                          By: /s/ Julie E. Collins
                                                     ---------------------------
                                                     JULIE E. COLLINS
                                                     Chief Financial Officer


Date:  January 13, 1998                          By: /s/ W. Thomas Hickcox
                                                     ---------------------------
                                                     W. Thomas Hickcox
                                                     Chief Executive Officer
                                       13