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Toll rallies on strength in luxury homes

On a day of upbeat housing market news, Toll Brothers added to the cheer Wednesday by reporting a higher quarterly profit and a strong increase in new orders.

Shares of the nation’s largest luxury homebuilder were lately up 4.1 percent at $33.11 after it said its third-quarter earnings rose 46 percent -- rising to $61.6 million in its third quarter ended July 31, 2012, from $42.1 million in the same quarter a year before.

“We are enjoying the most sustained demand we’ve experienced in over five years,” said Douglas C. Yearley, Toll’s chief executive officer.

“We believe the housing recovery is being driven by pent-up demand, very low interest rates and attractively priced homes,” he added. “Customers who have postponed buying for a number of years are moving into the market. With an industry-wide shortage of inventory in many markets, we are enjoying some pricing power.”

The good news from Toll comes as a report shows more Americans purchased previously-owned homes in July, suggesting improvement in the beleaguered housing market over the summer.

Existing home sales rose 2.3 percent last month, with sales rising to a seasonally adjusted annual rate of to 4.47 million units, up from 4.37 million units in June, the National Association of Realtors said Wednesday.

Low interest rates and a modest improvement in the labor market helped home buying conditions, the NAR said.

Wednesday’s housing number could be a sign of strength for the housing market, which is beginning to recover from the after-effects of the financial crisis.

Recent data suggest housing, which has suffered over the past six years, is perking up, with sales and prices becoming stable.

Toll is the only luxury homebuilder that is publicly traded. The company typically targets individuals who make at least $100,000 a year and have clean credit records.

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