Toll Brothers (TOL) reported Wednesday morning its results from the second quarter of fiscal 2013 indicating that the recovering U.S. housing market is gaining momentum as the largest luxury home builder built more homes and sold them at higher prices compared to the year earlier period.

For the quarter ended April 30, Horsham, Pennsylvania-based Toll Brothers recorded revenue of $516 million compared to $373.7 million in the second quarter last year. Net income for the quarter was $24.7 million, or 14 cents per share, versus $16.9 million, or 10 cents per share in the year prior period. The recent quarter included a pre-tax gain of $13.2 million in other income associated with the settlement of derivative litigation.

Wall Street was expecting profits of 7 cents per share on revenue of $512 million.

Home deliveries jumped 33 percent to 894 units. From a dollar standpoint, home deliveries increased 38 percent compared to last year’s quarter. The average price of a home rose from $557,000 in Q2 2012 to $577,000 in Q2 2013. Compared to the first quarter of this year, average prices were up by $8,000.

“Demand accelerated significantly this quarter,” said Douglas C. Yearley, Jr., chief executive at Toll Brothers. “Increased pricing power and stronger sales drove our agreements up 57% in dollars and 36% in units – the highest for any quarter in seven years.”

Toll Brothers’ backlog swelled by 69 percent to $2.53 billion. In terms of units, the backlog was up 52 percent to 3,655 units. The average price of a backlogged home was $693,000, compared to $624,000 in the same quarter last year.

Gross margin, excluding interest and write-downs, was essentially flat at 23.3 percent, compared to 23.2 percent last year. Selling, general and administrative costs as a percentage of revenue were cut from 18.3 percent to 15.4 percent.

“Our operating margin should also improve significantly as we project a greater than 50% increase in revenues in the second half of FY 2013 over the first half of FY 2013,” said Martin P. Connor, chief financial officer at Toll Brothers.

The company sees plenty of headroom for growth in the industry even with the recent upswing in sales and prices. Executive chairman Robert I. Toll referenced recent housing start data from Washington that showed annualized housing starts in April were still only 55 percent of the 1.5 million pace that was averaged between 1987 and 2006.

Homebuilders have benefited from interest rates being held near historic lows and steadily improving prices and sales rates, giving consumers the confidence to upgrade to more expensive homes.

Shares of TOL have risen about 36 percent in the last year through Tuesday’s close at $36.01 and are looking to gap upward on light pre-market activity so far Wednesday following the earnings report.