Lennar, the No. 2 U.S. homebuilder, reported higher-than-expected quarterly profit and revenue and said the housing market continued to make a "slow and steady recovery."
An improving job market and attractive mortgage rates continue to fuel demand for housing in the United States, helping homebuilders such as Lennar and PulteGroup.
U.S. home prices are set to rise almost 5 percent next year, despite the prospect of several interest rate increases, according to the latest Reuters poll.
The U.S. Federal Reserve raised interest rates last week and signaled a faster pace of increases in 2017.
President-elect Donald Trump's promises of tax cuts, infrastructure spending and deregulation have raised expectations that the economy is set for stronger growth.
"With the anticipation of a new President focusing on accelerating economic growth, we believe that our fortified balance sheet, our diversified business model and our refined product offerings, will continue to hold us in good stead in a high-growth economy, despite the potential of moderately rising interest rates over the next several years," Chief Executive Stuart Miller said in a statement on Monday.
Lennar, whose shares were up 2.6 percent in premarket trading, is the first homebuilder to report since the Fed raised interest rates by a quarter of a percentage point last week.