ConDig (20-Apr-17). Profit at NVR Inc shot up 58% in the first quarter compared to a year earlier as the Reston, Virginia-based homebuilder and mortgage provider booked a 12% jump in revenue.

Net income for the first quarter ended March 31 was $102.9 million compared to $65.3 million in the year-ago period, while revenue was $1.27 billion compared to $1.14 billion in the first quarter of last year.

The company also said that profit was boosted following a reduction in its effective tax rate in the first quarter to 22.1% from 36.8%.

New orders, an indicator of future revenue for homebuilders, increased 7% to 4,424 units in the first quarter compared to 4,137 units in the same period last year.

The average sales price of new orders in the first quarter was $392,600, up 5% on the same period last year.

The group’s homebuilding division posted revenue of $1.25 billion in the first quarter, up 11% on a year-ago and income before tax of $117.1 million.

Tight inventory levels and strong demand continue to underpin the US housing market, while mortgage rates remain near historic lows despite recent hikes.

But growth in the housing sector this year could be hampered by forecasts of further rises in mortgage rates that could keep many price-sensitive first-time buyers rooted to the sidelines of the market, while homebuilders continue to face high labor and material costs.

Latest Commerce Department figures released this week show that housing starts dropped 6.8% last month to a seasonally adjusted annual rate of 1.215 million, but were still up 9.2% on the year-ago period of 1.113 million.