UPDATE 1-Higher selling prices boost PulteGroup's home sale revenue
Jan 30 (Reuters) - PulteGroup Inc, the No.2 U.S. homebuilder, reported a 9 percent rise in revenue from home sales as low supply allowed the company to sell houses at higher prices, sending its shares up 5 percent before the bell.
U.S. homebuilders have been able to raise selling prices over the past two years due to a shortage of land ready to build on and a shrinking supply of existing homes.
PulteGroup, which caters to first-time buyers and first-move up buyers, said its average selling price rose 13 percent to $325,000 in the fourth quarter ended Dec. 31, more than offsetting the impact of a 4 percent fall in homes completed.
U.S. housing demand has slowed over the past few months due to higher mortgage rates. Orders booked by PulteGroup fell 18 percent to 3,214 homes in the quarter.
The company, however, reiterated on Thursday that it expected the housing recovery to continue in 2014.
PulteGroup said in October that the weakness in demand would be "short-lived."
The company's net income jumped to $220.1 million, or 57 cents per share, in the fourth quarter from $58.7 million, or 15 cents per share, a year earlier.
Home sale revenue rose to $1.61 billion from $1.48 billion.
PulteGroup shares have dropped 9 percent in the past 12 months and have underperformed the Dow Jones Home Construction index, which has fallen 5 percent.
The stock, which closed at $19.43 on the New York Stock Exchange on Wednesday, was at $20.48 in premarket trading on Thursday.