Lennar, the No. 3 U.S. homebuilder, reported a better-than-expected quarterly profit as it sold more homes at higher prices, indicating the U.S. housing recovery is firmly on track.
U.S. homebuilders have been under pressure since May when interest rates started rising on fears that the Federal Reserve would taper bond purchases, adding to the uncertainty over the housing recovery. The Fed last week decided to postpone the winding down of its monetary stimulus.
Lennar said on Tuesday orders for new homes rose 14 percent in the third quarter and that the long-term outlook for its business remains "extremely bright".
"We continue to see long-term fundamental demand in the market driven by the significant shortfall of new single-family and multi-family homes built over the last five years," Chief Executive Stuart Miller said in a statement.
U.S. housing starts rose less than expected in August amid a sharp slowdown in the multifamily sector, but a surge in permits for single-family homes pointed to sustained strengthening in the housing market recovery.
Lennar primarily sells single-family homes in communities targeted at first-time, move-up and active adult homebuyers.
The company is better positioned than many of its peers to continue building houses as it got back into the game early and actively bought land over the past several years.
Miami, Florida-based Lennar was among the top 5 U.S. homebuilders to report quarterly earnings. Smaller rival KBHome also reported a big jump in its fiscal third-quarter profit, which soared to 30 cents per share from four cents in the comparable year-ago period.