NEW YORK ( TheStreet) -- Toll Brothers ( TOL), the biggest luxury home builder in the U.S.,  reported earnings on Wednesday that beat analyst estimates, and raised its average selling price forecast for 2015.

Lower tax provisions gave the company's declining revenue numbers a boost, and analysts appear to have a positive outlook about the U.S. housing market.

Toll Brothers reported earnings per share of $0.37, up from $0.35 per share last year, and beating analysts' estimates of $0.35. However, revenue was down 1% to $852.58 million, missing estimates of $861.15 million. The average price of new home orders increased around 12.5% to $826,000.

The latest government data showed that home sales were up, and that increasing numbers of Americans are investing in home renovations following a harsh winter on the East Coast.

Contracts for new homes were up 25% across the quarter. The most profitable market for Toll Brothers this quarter was California, which accounted for around 30% of signed contracts. Shares in Toll Brothers have risen 8% so far this year, but were down on the earnings numbers, off 2.8% to $35.97 at around 1 p.m. Toll Brothers has also been diversifying into high-rise apartments and condominiums with its City Living urban development division.

"As we look to fiscal year 2016," CEO Douglas Yearley told investors, "we currently expect gross margin and net income growth based on an increase in the average price of our homes, our growing and profitable presence in California, increased revenues projected from our City Living division, and overall solid current demand in most of our markets."

Added Executive Chairman Robert Toll: "The economy and housing continue on parallel paths of recovery. It appears the housing market is on firm footing and heading in the right direction. As pent-up demand is released, we envision a gradual and elongated recovery for housing."

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