AMERICAN HOMESTAR ACQUIRES 3 RETAIL SALES CENTERS.

HOUSTON--(BUSINESS WIRE)--Feb. 21, 1996--American Homestar Corporation (Nasdaq/NM:HSTR) today announced that it has acquired the assets and has assumed the operations of three existing manufactured home retail sales centers in El Paso, Texas. The Company now operates 43 retail sales centers, up from 34 at the beginning of fiscal 1996.

Buck Teeter, Chairman and Co-Chief Executive Officer, stated, "The acquisition of these centers represents an opportunity to expand our presence into an important new market area and brings to five the number of centers we have opened or acquired during the current fiscal quarter. Entering a new market through the acquisition of established retail sales centers should allow for positive results from the outset, without the typical delays associated with the start-up of new centers."

According to Lad Dawson, President and Co-Chief Executive Officer, the three El Paso centers sold 224 new homes in their last fiscal year. Dawson said, "We plan to convert a substantial percentage of their sales to our own company-manufactured products as quickly as possible in accordance with our vertical integration strategy. We intend to offer financing for homes sold by these centers through 21st Century Mortgage Corporation, our new finance affiliate, as well."

American Homestar produces manufactured homes from its three plants in the Dallas-Ft. Worth area and retails its products through 43 Company-owned and more than 100 independently owned retail sales centers in Texas, New Mexico, Oklahoma, Louisiana, Colorado, Arkansas and Kansas. The Company also provides retail financing through its finance affiliate, 21st Century Mortgage Corporation, and provides transportation and insurance services to its customers.

CONTACT: American Homestar Corp., Houston

Craig Reynolds, 713/334-9702