Profits soar for home builder Toll Bros.

Benefiting from strong buyer demand at the top end of the housing market, Toll Brothers reported second-quarter profits more than doubled from a year ago and it predicted higher prices for its luxury homes the rest of the year.

The home builder earned $65.2 million, or 35 cents per share, in the quarter ended April 30. That compares with $24.7 million, or 14 cents per share, in 2013's second quarter.

Analysts had estimated earnings of 27 cents per share, according to a FactSet survey.

Revenue was $860.4 million compared with $516 million a year ago. Toll delivered 1,218 homes in the quarter, a 36% increase.

The average price of homes delivered was $706,000, up 22% from a year ago. Toll said it expects an average price of $690,000 to $720,000 for all homes delivered this year, raising the bottom end of its previous estimated price range from $675,000.

Demand was solid, but relatively flat compared with the much stronger pace in 2011, when the housing market was in the early stage of recovery, said CEO Douglas Yearley.

Toll's expansion in California and Texas, among the strongest housing markets in the U.S., will be "a major source of future growth," Yearley said.

With the U.S. supply of new homes for sale still tight at 5.3 months based on April's annualized sales rate, that inventory could quickly evaporate if both demand and the pace of sales increase, said Robert Toll, executive chairman, in a statement.

"Current demographics suggest that new home sales should pick up. If the tight supply bumps into increasing demand, prices could rapidly rise," he said.

Toll Brothers' shares were up about 1.5% to $36.17 in late morning trading following the earnings announcement before the market's opening Wednesday.