SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

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

              [X] QUARTERLY REPORT PURSUANT TO SECTION 10 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended February 28, 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                             April 9, 1997
     ---------------------                             -------------
         $.01 par value                                  6,897,580

--------------------------------------------------------------------------------
<PAGE>
                         CONTINENTAL HOMES HOLDING CORP.


                                    FORM 10-Q
                              FOR THE QUARTER ENDED
                                FEBRUARY 28, 1997


                                TABLE OF CONTENTS


PART I.           FINANCIAL INFORMATION                                     Page

  Item 1.  Financial Statements:
         Consolidated Balance Sheets as of February 28, 1997 and
              May 31, 1996..................................................   3

         Consolidated Statements of Income for the three and nine months ended
              February 28, 1997 and 1996....................................   4

         Consolidated Statements of Cash Flows for the nine months ended
              February 28, 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 11. 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>
                                                                    February 28,    May 31,
                                                                        1997         1996
                                                                        ----         ----
                                                                         (In thousands)
<S>                                                                  <C>          <C>      
ASSETS                                                                    
Homebuilding:
      Cash and cash equivalents                                      $  37,027    $  25,236
      Receivables                                                       24,196       16,693
      Homes, lots and improvements in production                       392,958      344,880
      Property and equipment, net                                        3,727        2,271
      Prepaid expenses and other assets                                 21,323       16,797
      Excess of cost over related net assets acquired                    9,894       11,715
                                                                     ---------    ---------
                                                                       489,125      417,592
                                                                     ---------    ---------
Mortgage banking:
      Mortgage loans held for sale                                      20,935       20,350
      Mortgage loans held for long-term investment, net                      0           86
      Other assets                                                         289          406
                                                                     ---------    ---------
                                                                        21,224       20,842
                                                                     ---------    ---------
      Total assets                                                   $ 510,349    $ 438,434
                                                                     =========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Homebuilding:
      Accounts payable and other liabilities                         $  63,484    $  52,240
      Notes payable, senior and convertible subordinated debt          275,360      244,999
      Deferred income taxes                                              2,528        1,236
                                                                     ---------    ---------
                                                                       341,372      298,475
                                                                     ---------    ---------
Mortgage banking:
       Notes payable                                                    14,180        5,359
       Bonds payable                                                         0          168
       Other                                                               550          686
                                                                     ---------    ---------
                                                                        14,730        6,213
                                                                     ---------    ---------
       Total liabilities                                               356,102      304,688
                                                                     ---------    ---------

Minority interest                                                        4,241        4,797
                                                                     ---------    ---------
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 - 7,080,900 shares          71           71
       Treasury stock, at cost - 183,320 and 88,265 shares              (2,191)        (384)
       Capital in excess of par value                                   60,517       60,396
       Retained earnings                                                91,609       68,866
                                                                     ---------    ---------
       Total stockholders' equity                                      150,006      128,949
                                                                     ---------    ---------
       Total liabilities and stockholders' equity                    $ 510,349    $ 438,434
                                                                     =========    =========
</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             Nine months ended
                                                    February 28,                  February 28,
                                                    ------------                  ------------
                                                 1997           1996           1997           1996
                                                 ----           ----           ----           ----
<S>                                          <C>            <C>            <C>            <C>        
REVENUES
     Home sales                              $   169,986    $   137,180    $   516,533    $   405,510
     Land sales                                      424            153         15,548         11,420
     Mortgage banking and title operations         2,396          3,411          8,226          8,357
     Other income, net                                 3            252             99            358
                                             -----------    -----------    -----------    -----------
         Total revenues                          172,809        140,996        540,406        425,645
                                             -----------    -----------    -----------    -----------

COSTS AND EXPENSES
Homebuilding:
     Cost of home sales                          140,783        111,910        423,433        330,767
     Cost of land sales                              102            156         14,594         11,485
     Selling, general and administrative
       expenses                                   18,074         15,052         53,798         45,080
     Interest, net                                   847          1,572          3,593          4,026
     Minority interest                              (255)          (164)          (557)          (164)
Mortgage banking and title operations:
     Selling, general and administrative
       expenses                                    1,879          1,762          6,017          5,017
     Interest, net                                  (178)          (157)          (577)          (123)
                                             -----------    -----------    -----------    -----------

         Total costs and expenses                161,252        130,131        500,301        396,088
                                             -----------    -----------    -----------    -----------

Income before income taxes and
     extraordinary loss                           11,557         10,865         40,105         29,557
Income taxes                                       4,799          4,705         16,319         12,858
                                             -----------    -----------    -----------    -----------
Income from operations                             6,758          6,160         23,786         16,699
Extraordinary loss:
     Loss on extinguishment of
         debt, net                                     0           (859)             0           (859)
                                             -----------    -----------    -----------    -----------
Net income                                   $     6,758    $     5,301    $    23,786    $    15,840
                                             ===========    ===========    ===========    ===========

Earnings per common share
     Income from operations                  $       .98    $       .88    $      3.42    $      2.40
     Net income                                      .98            .76           3.42           2.28
Earnings per common share assuming
  full dilution
      Income from operations                 $       .72    $       .65    $      2.48    $      1.95
      Net income                                     .72            .57           2.48           1.86
Cash dividends per share                     $       .05    $       .05    $       .15    $       .15
Weighted average number of shares
         outstanding                           6,897,402      6,974,427      6,960,023      6,949,509
                                             ===========    ===========    ===========    ===========
</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)
<TABLE>
<CAPTION>
                                                                                     Nine months ended
                                                                                        February 28,
                                                                                        ------------
                                                                                      1997        1996
                                                                                      ----        ----
                                                                                       (In thousands)
<S>                                                                                <C>         <C>     
Cash flows from operating activities                                                  
     Net income                                                                    $ 23,786    $ 15,840
         Adjustments to reconcile net income to net 
         cash provided (used) by operating activities:
              Depreciation and amortization                                           2,423       2,415
              Minority interest                                                        (556)       (164)
              Increase (decrease) in deferred income taxes                            1,292         889
              Extraordinary loss on extinguishment of debt                             --         1,457
     Decrease (increase) in assets:
         Homes, lots and improvements in production                                 (40,281)    (36,458)
         Receivables                                                                 (7,845)      9,298
         Prepaid expenses and other assets                                           (4,544)      4,635
     Increase (decrease) in liabilities:
         Accounts payable and other liabilities                                       9,664       2,331
                                                                                   --------    --------
     Net cash provided (used) by operating activities                               (16,061)        243
                                                                                   --------    --------

Cash flows from investing activities:
     Net additions of property and equipment                                         (2,094)       (475)
     Cash paid for acquisitions, net of cash acquired                                (1,205)       --
     Adjustment to purchase price                                                     1,700        --
                                                                                   --------    --------
     Net cash used by investing activities                                           (1,599)       (475)
                                                                                   --------    --------

Cash flows from financing activities:
     Increase (decrease) in notes payable to financial
         institutions                                                                12,173     (24,998)
     Retirement of bonds payable                                                       (168)    (17,227)
     Retirement of Convertible Subordinated Notes                                      --       (33,250)
     Issuance of Senior Notes                                                        20,175        --
     Issuance of Convertible Subordinated Notes                                        --        83,285
     Repurchase of stock                                                             (1,922)       --
     Stock options exercised                                                            236         510
     Dividends paid                                                                  (1,043)     (1,042)
                                                                                   --------    --------
     Net cash provided by financing activities                                       29,451       7,278
                                                                                   --------    --------

     Net increase (decrease) in cash                                                 11,791       7,046
     Cash at beginning of period                                                     25,236      12,848
                                                                                   --------    --------
     Cash at end of period                                                         $ 37,027    $ 19,894
                                                                                   ========    ========

Supplemental disclosures of cash flow information:  
     Cash paid during the period for:
         Interest, net of amounts capitalized                                      $  4,680    $  6,064
         Income taxes                                                              $ 12,987    $ 10,422
</TABLE>
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,  1996,  filed  with  the
              Securities and Exchange Commission.

              The  results of  operations  for the three and nine  months  ended
              February 28, 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
              $14,755,000 and $12,211,000 and expensed as a component of cost of
              home sales  $13,352,000  and  $11,786,000 in the nine months ended
              February 28, 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>
                                                                  February 28,  May 31,
                                                                      1997       1996
                                                                      ----       ----
                                                                      (In thousands)
<S>                                                                <C>        <C>     
10% senior notes, due 2006, net of discount of $1,647 and $1,972   $148,353   $128,028
12% Senior notes, due 1999, net of premium of $77 and $113           11,577     11,613
6-7/8% convertible subordinated notes, due 2002                      86,250     86,250
Notes payable                                                        29,180     19,108
                                                                   --------   --------

                                                                   $275,360   $244,999
                                                                   ========   ========
</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     Nine months ended
                                          February 28,          February 28,
                                          ------------          ------------
                                         1997       1996       1997       1996
                                         ----       ----       ----       ----
                                                    (In thousands)

Interest expense, homebuilding         $ 1,300    $ 1,726    $ 4,285    $ 4,387
Interest income, homebuilding             (453)      (154)      (692)      (361)
                                       -------    -------    -------    -------
                                       $   847    $ 1,572    $ 3,593    $ 4,026
                                       =======    =======    =======    =======

Interest expense, mortgage banking     $   135    $   309    $   395    $ 1,677
Interest income, mortgage banking         (313)      (466)      (972)    (1,800)
                                       -------    -------    -------    -------
                                       $  (178)   $  (157)   $  (577)   $  (123)
                                       =======    =======    =======    =======

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.
                                       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           Nine months ended
                                             February 28,                February 28,
                                             ------------                ------------
                                         1997          1996          1997          1996
                                         ----          ----          ----          ----
<S>                                   <C>           <C>           <C>           <C>       
Units delivered                            1,208         1,041         3,721         3,098
Average sales price                   $  140,717    $  131,777    $  138,816    $  130,894
Revenue from home sales (000's)       $  169,986    $  137,180    $  516,533    $  405,510
Percentage increase from prior year         23.9%         31.3%         27.4%         32.6%
Change due to volume                        16.0%         30.6%         20.1%         31.4%
Change due to average sales price            7.9%           .7%          7.3%          1.2%
</TABLE>

         The volume  increase in the quarter and nine months ended  February 28,
1997  compared to the same periods  during  fiscal 1996  resulted  from improved
deliveries  in Denver,  South  Florida,  California  and Texas and the Company's
expansion into the Dallas, Texas market. The average sales price increase in the
quarter and nine months  ended  February  28, 1997  compared to the same periods
during fiscal 1996 resulted  primarily  from an increase in volume in the Denver
and  California  markets  where the  average  sales price is over  $200,000  and
$300,000, respectively.

         The following  table  summarizes  information  related to the Company's
backlog at the dates indicated:
                                                     February 28,
                                                     ------------
                                                (Dollars in thousands)
                                              1997                  1996
                                              ----                  ----
                                         Units    Dollars      Units    Dollars
                                       --------   --------   --------   --------
Phoenix                                     713   $ 95,417        904   $117,143
Texas                                       499     54,804        555     59,930
South Florida                               163     19,903        139     19,873
Denver                                      211     41,685        219     45,123
Southern California                          50     15,867        116     28,486
                                       --------   --------   --------   --------
         Total backlog                    1,636   $227,676      1,933   $270,555
                                       ========   ========   ========   ========

Average price per unit                                $139                  $140
                                                      ====                  ====

         The aggregate sales value of new contracts  signed  decreased 9% in the
nine months ended February 28, 1997 to $432,426,000  representing 3,208 homes as
compared with  $473,351,000  representing  3,538 homes for the nine months ended
February 28, 1996.  Most of the decline was a result of decreased order activity
in the  Phoenix and Austin  markets  during the first nine months of fiscal 1997
compared to the same period last year.  This decline was the result of unusually
strong new orders in the prior period and not due to a significant deterioration
in either market.
                                       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 February 28,            Nine months ended February 28,
                                         ---------------------------            ------------------------------
                                           1997                1996                1997                1996
                                           ----                ----                ----                ----
                                    Dollars      %      Dollars      %      Dollars      %      Dollars      %
                                    --------   -----    --------   -----    --------   -----    --------   -----
<S>                                 <C>        <C>      <C>        <C>      <C>        <C>      <C>        <C>   
Revenue from
  home sales                        $169,986   100.0%   $137,180   100.0%   $516,533   100.0%   $405,510   100.0%
Cost of home sales                   140,783    82.8     111,910    81.6     423,433    82.0     330,767    81.6
                                    --------   -----    --------   -----    --------   -----    --------   -----
Gross profit                          29,203    17.2      25,270    18.4      93,100    18.0      74,743    18.4
SG&A expenses                         18,074    10.6      15,052    11.0      53,798    10.4      45,080    11.1
                                    --------   -----    --------   -----    --------   -----    --------   -----
Operating income from
  homebuilding                        11,129     6.6      10,218     7.4      39,302     7.6      29,663     7.3
Interest, net                            847      .5       1,572     1.1       3,593      .7       4,026     1.0
                                    --------   -----    --------   -----    --------   -----    --------   -----
Pre-tax profit from
  homebuilding                      $ 10,282     6.1%   $  8,646     6.3%   $ 35,709     6.9%   $ 25,637     6.3%
                                    ========   =====    ========   =====    ========   =====    ========   =====
</TABLE>

         Gross profit from home sales was 17.2% for the quarter  ended  February
28, 1997  compared to 18.4% for the  corresponding  fiscal  1996  period.  Gross
profit from home sales was 18.0% for the nine  months  ended  February  28, 1997
compared to 18.4% for the nine months ended  February  28, 1996.  The decline in
gross profits was  primarily  due to lower margins in the Austin and  California
markets.  In addition,  the Company's highest margins are in Phoenix and Austin.
As deliveries  increase in other markets,  the mix will continue to put pressure
on margins.

         The  increase  in total SG&A  expense  for the  quarter and nine months
ended  February 28, 1997 compared to the quarter and nine months ended  February
28, 1996 was  principally due to the increased  volume which increased  variable
marketing   costs   (sales   commissions,   advertising   and  model   furniture
amortization).  Additionally,  SG&A  increased  with the  addition of the Dallas
operation  during the first quarter of fiscal 1997.  SG&A expenses for each home
delivered were $14,962 and $14,459 in the third quarter of fiscal 1997 and 1996,
respectively and $14,458 and $14,551 in the first nine months of fiscal 1997 and
1996,   respectively.   The  Company   capitalizes  certain  SG&A  expenses  for
homebuilding.  Accordingly,  total SG&A costs  incurred  for  homebuilding  were
$20,941,000  and  $62,262,000  for the three and nine months ended  February 28,
1997 compared to $16,990,000 and $50,831,000 for the  corresponding  fiscal 1996
periods.

         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 $6,832,000 and  $19,040,000 for the three and nine months ended February 28,
1997, respectively compared to $5,836,000 and $16,598,000 for the three and nine
months ended  February 28, 1996,  respectively.  For the nine month period ended
February 28, 1997,  interest,  net for homebuilding was $3,593,000 compared with
$4,026,000 for the nine months ended February 28, 1996.

         The  Company's  pre-tax  profit from  homebuilding  for the nine months
ended  February  28,  1997  was  $35,709,000  compared  to  $25,637,000  for the
corresponding  period ended February 28, 1996.  Pre-tax profit  increased in the
nine months of fiscal 1997 due primarily to increased volume in most markets and
improved operating results in all markets.
                                       9
<PAGE>
Mortgage Banking
----------------

         The Company's  mortgage  banking  operations are conducted  through its
wholly-owned  subsidiary  CH Mortgage  Company  ("CHMC").  The  following  table
summarizes operating information for the Company's mortgage banking operations:

                                               Quarters ended  Nine months ended
                                                February 28,      February 28,
                                                ------------      ------------
                                                1997     1996     1997     1996
                                                ----     ----     ----     ----
                                                      (Dollars in thousands)
Number of loans originated                        677      678    2,234    2,039

Loan origination fees                          $  677   $  639   $2,157   $1,925
Sale of servicing and marketing gains           1,010    2,169    3,705    4,647
Other revenue                                     277      163      848      368
                                               ------   ------   ------   ------
         Total revenues                         1,964    2,971    6,710    6,940
General and administrative expenses             1,599    1,496    5,103    4,192
                                               ------   ------   ------   ------
Operating income (loss) from mortgage banking     365    1,475    1,607    2,748
Interest, net                                     178      157      577      119
                                               ------   ------   ------   ------
Pre-tax profit from mortgage banking           $  543   $1,632   $2,184   $2,867
                                               ======   ======   ======   ======

Revenues  from mortgage  banking  decreased in the quarter and nine months ended
February 28, 1997 primarily as a result of a gain  recognized in January 1996 as
a result of the sale of  approximately  $47,705,000 in servicing rights from the
servicing  portfolio.  General  and  administrative  expenses  increased  in the
quarter and nine months  ended  February  28, 1997  primarily  as a result of an
increase in  originations  and  expansion  into the Denver,  Miami and  Southern
California markets.

  Consolidated operations

         Net income was $23,786,000  ($3.42 per share,  $2.48 fully diluted) for
the nine months  ended  February  28, 1997  compared to  $15,840,000  ($2.28 per
share, $1.86 fully diluted) for the period ended February 28, 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 $110 million
unsecured  revolving line of credit.  Borrowings under the Credit Agreement bear
interest at LIBOR plus 1.75% or prime plus .125% 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  February  28,  1997 was
$88,266,000 and $20,000,000 was  outstanding.  The Company believes that amounts
                                       10
<PAGE>
generated from  operations  and such  additional  borrowings  will provide funds
adequate  to finance  its  existing  homebuilding  activities  and meet its debt
service  requirements.  The Company is  currently  negotiating  to increase  the
aforementioned  credit agreement to $140 million.  Such increase will be used to
fund the  development  costs at its Rancho  Carrillo  project in San Diego.  The
Company believes the line will be increased by the end of fiscal 1997.

         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
February 28, 1997, the amount outstanding under the warehouse line of credit and
the  amount of  funding  drafts  that had not been  presented  for  payment  was
$14,180,000.  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).  In connection with the redemption of the notes,  the
Company  recorded,  in the third quarter of fiscal 1996, an extraordinary  loss,
net of taxes,  of  approximately  $859,000 due to the  write-off of  unamortized
discount  and  debt  issuance  costs.  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.  In connection with the repurchase of
the 12% Senior  Notes,  the Company  recorded,  in the fourth  quarter of fiscal
1996, an extraordinary loss, net of taxes, of approximately,  $6,059,000 related
primarily to a tender offer premium.  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.

         Pursuant to a stock  repurchase plan approved by the Board of Directors
on December 22, 1994, the Company repurchased 117,000 shares of its common stock
at an average price of $16.36 in November 1996.

Forward looking information; certain cautionary statements
----------------------------------------------------------

              Certain statements contained in this "Management's  Discussion and
Analysis of Financial  Condition and Results of Operations"  section are forward
looking  statements.  Such statements involve risks and uncertainties and actual
results may differ materially from those projected or implied.  Further, certain
forward  looking  statements are based on assumptions of future events which may
not prove to be accurate.  Risks and uncertainties include risks associated with
new and future communities, competition, financing availability, fluctuations in
interest rates or labor and material costs,  government  regulation,  geographic
concentration and general economic conditions.
                                       11
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES

                                     PART II
                                OTHER INFORMATION

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

              None.

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

         (a)    11    Statement of Computation of Earnings Per Share.

                27    Financial Data Schedule.

         (b)    Reports on Form 8-K: There were no reports on Form 8-K filed for
         the nine months ended February 28, 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:  April 10, 1997                   By:  /s/Julie E. Collins
                                             -----------------------------------
                                             JULIE E. COLLINS
                                             Financial Vice President


Date:  April 10 , 1997                  By:  /s/ Donald R. Loback
                                             -----------------------------------
                                             DONALD R. LOBACK
                                             Chief Executive Officer
                                       13