By Arunima Banerjee and Ankit Ajmera

(Reuters) - Toll Brothers Inc's <TOL.N> home orders in the third quarter rose the most in two years, and the company joined other large U.S. homebuilders in posting big jumps in quarterly revenue, underscoring steady growth in the U.S. housing market.

Shares of Toll, which builds homes that cost upwards of $2 million, rose as much as 6 percent to $31 on Tuesday - their highest in more than seven months.

The luxury homebuilder's results and upbeat new home sales data also boosted the PHLX Housing Index <.HGX>. Shares of D.R. Horton Inc <DHI.N>, PulteGroup Inc <PHM.N> and Lennar Corp <LEN.N> rose 2-3 percent.

An improving job market as well as mortgage rates that are near historic lows are supporting a bright outlook for the U.S. housing market.

New U.S. single-family home sales unexpectedly rose in July, reaching their highest level in nearly nine years as demand increased broadly.

Toll on Tuesday reported an 18.2 percent jump in orders - a key metric of future revenue for homebuilders - to 1,748 units for the third quarter, the highest growth in two years.

Revenue jumped 23.5 percent to $1.27 billion.

"Demand within Toll remains fine, suggesting that the leisure market is holding fine," Gabelli & Co analyst Alvaro Lacayo said.

D.R. Horton, the largest U.S. homebuilder, reported last month a nearly 10 percent rise in revenue for the April-June quarter, while PulteGroup, the No.3 U.S. homebuilder, reported a 41 percent rise in the same period.

Pulte's shares have risen nearly 20 percent since the beginning of the year, while D.R. Horton's stock is trading near a decade-high that it touched last month.

PROFIT JUMPS

Horsham, Pennsylvania-based Toll tightened its forecast range for home deliveries for the year ending Oct. 31 and raised the lower end of its average selling price forecast.

The company said it expects home deliveries for the year ending Oct. 31 to be 5,900-6,200, compared with its previous range of 5,800-6,300 homes.

Average selling price for the fiscal year is expected to be to $840,000-$850,000, compared with Toll's previous forecast of $820,000-$850,000.

The homebuilder, which caters to second-home buyers in the United States, lowered its adjusted gross margin forecast for the year.

The company, which also develops golf courses and country clubs, expects adjusted gross margin for the year to be 25.6-25.8 percent, compared with its previous range of 25.8-26.2 percent.

Toll said it was cutting it full-year gross margin forecast as it expected to deliver a "few high-margin units" in its City Living business, which builds high-rises, in fiscal year 2017, instead of fiscal year 2016.

City Living accounted for about 8 percent of Toll's annual homebuilding revenue in fiscal 2015.

The company's net income nearly doubled to $105.5 million, or 61 cents per share, in the quarter ended July 31 from $66.7 million, or 36 cents per share, a year earlier.

Analysts on average had expected a profit of 61 cents per share and revenue of $1.25 billion, according to Thomson Reuters I/B/E/S.

Up to Monday's close, shares of Toll had fallen 12 percent this year.

(Reporting by Arunima Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty and Sayantani Ghosh)