(Reuters) - Toll Brothers Inc (TOL.N), the largest luxury homebuilder in the United States, reported a higher quarterly profit and said new orders rose sharply, indicating that the U.S. housing market is well on its way to recovery.
The U.S. housing recovery has gained traction this year with prices for single-family homes having risen since February. Economists expect home construction to add to U.S. economic growth this year for the first time since 2005.
The Standard & Poor’s homebuilder index .GSPHOME has almost doubled in value this year.
(For a graphic on the U.S. housing market, click: r.reuters.com/pum86s)
Toll, which targets affluent customers who typically make at least $100,000 a year and have spotless credit records, said pent-up demand, rising home prices and low interest rates motivated buyers to return to the housing market in 2012.
The Federal Reserve, which has kept interest rates at rock-bottom levels since 2008 to support the housing market, launched an open-ended program to buy mortgage-backed securities in September.
Average selling prices for Toll rose to $582,000 in the fourth quarter from $565,000 a year earlier.
Toll -- the only publicly traded luxury homebuilder -- has gained market share as small and mid-sized private builders are constrained for capital.
Toll’s net signed contracts jumped 70 percent to 1,098 units in the fourth quarter ended October. Backlog climbed 54 percent.
Net income rose to $411.4 million, or $2.35 per share, in the fourth quarter from $15.0 million, or 9 cents per share, a year earlier.
The fourth-quarter profit included a net tax benefit of $350.7 million.
Revenue rose 48 percent to $632.8 million.
Toll’s shares, which have gained more than 50 percent in value so far this year, closed at $32.43 on the New York Stock Exchange on Monday.
Reporting by Sagarika Jaisinghani in Bangalore; Editing by Roshni Menon