PHILADELPHIA — For more than a year, the US housing market has had nothing but bad news. Rising interest rates, falling prices and a slowing economy sucked the life out of the once-booming industry.Yesterday, the housing market got a whisper of good news when Toll Brothers, the largest luxury home builder in the US, said it sees some signs of stabilisation in the slumping housing sector and raised its forecast for first-quarter home deliveries.

“Fifteen months into the current slowdown, we may be seeing a floor in some markets,” Robert Toll, the company’s chief executive officer, said Tuesday.

Granted, Toll was referring to a hint of a pickup in the Northeast. But for an industry starving for signs of a rebound, it was enough.

Shares of Horsham, Pennsylvania-based Toll Brothers rose by three percent, or 96 cents, to $32.87 after the news, despite reporting that its fourth-quarter earnings slumped 44 percent.

Toll Brothers posted net income of $173.8 million, or $1.07 per share, compared with $310.3 million, or $1.84 per share, during the same period last year.

Analysts surveyed by Thomson Financial were expecting fourth-quarter earnings of $1.06 per share.

Quarterly revenue dropped ten percent to $1.81 billion from $2.02 billion, narrowly missing Wall Street’s estimate of $1.82 billion.

A higher-than-expected number of buyers cancelled their orders in the latest quarter and the company incurred costs from walking away from several parcels of land it had optioned, or acquired a right to buy, amid the housing slowdown.

The most recent quarter includes pre-tax writedowns of $115 million versus writedowns of $1.4 million last year. Excluding the writedowns, which were mostly for owned and optioned land, fourth-quarter earnings were $1.49 per share in 2006.

Robert Toll said a few areas in the East Coast showed signs of stabilisation, including Washington, D.C., and suburbs in Maryland and northern Virginia.

After cutting projections for several quarters, Toll Brothers said it expects in the first quarter to deliver a range of 1,600 to 1,900 homes at average prices of $670,000 to $680,000. That’s up from a prior projection of 1,500 to 1,800 units.

But Greg Gieber, an analyst with A.G. Edwards, said the housing market may not have hit bottom yet.

“It’s too soon to tell,” he said. “In November, there is a seasonal uptick in home sales.”

Alex Barron, an analyst with JMP Securities, said heavy discounting by new home builders also could account for the sales improvement.

“Builders were cutting prices more aggressively than before in order to generate some sales. I saw Toll Brothers doing the same thing,” he said.

Barron said his own research into multiple listing service sales in Washington, D.C., and other once-hot housing markets shows a continued slump. When the housing market is at its bottom, he said home prices will stabilise, sales will pick up and inventory will decrease.

Earlier this month, the National Association of Realtors reported a 0.5 percent increase in existing home sales for October — the first increase in seven months. But the median price for a home sold dropped by 3.5 percent from a year ago, the largest year-over-year drop on record.

Lawrence Yun, the group’s senior economist, said the housing market may be starting to stabilise, pointing to the uptick in existing home sales.

For the fourth quarter, Toll Brothers said the value of signed contracts fell by 56 percent to $706 million from a year ago. The worst showing was in Florida and the Carolinas, where the number of contracts fell by 78 percent.

The southwestern states of Arizona, Colorado, Nevada and Texas were the second weakest, down 62 percent in the number of contracts signed. Toll’s Midwest market — Illinois, Michigan, Minnesota and Ohio — had the smallest dip, down 38 percent in contracts. Signings plunged by roughly half in the Northeast, mid-Atlantic and the West.