Shares of Miami-based Lennar Corp., the third-largest U.S. homebuilder by revenue, rose to its highest level in more than four years after reporting a 20 percent jump in new orders as the U.S. housing market shows signs of stabilizing.

Orders increased to 3,027 for the fourth quarter ended Nov. 30 from 2,520 a year earlier, the company said in a statement. The shares gained $1.49, or 7.2 percent, to $22.25 in New York, their highest close since October 2007.

“As I look ahead to 2012, I’m cautiously optimistic that we’re seeing a real bottom form and we’re beginning to see a recovery,” Lennar Chief Executive Officer Stuart Miller said on a conference call Wednesday. “Stabilization will emanate from the most desirable markets and spread slowly outward.”

U.S. housing starts climbed to a 19-month high and builder confidence rose for a third consecutive month in November. While there are signs that the market may be starting to pick up, new homes sold at an annual pace of 315,000 in November, putting 2011 on pace to be the slowest year in Commerce Department records dating to 1963.

Lennar’s fourth-quarter sales improved in markets that have been hit hard by the real estate collapse, including Florida, Atlanta, Phoenix, Las Vegas and parts of California, according to Miller. More people are considering buying, including some who lost homes to foreclosure, as the cost of owning compares favorably with renting, he said.

“They are looking to reconsider the rental lifestyle where rental rates have been rising and are likely to continue to rise for the foreseeable future,” Miller said.

Fourth-quarter revenue increased to $952.7 million from $860.1 million a year earlier. Homebuilding revenue rose 9.6 percent to $834 million and deliveries of homes to buyers increased 9 percent to 3,375.

Net income for the fourth quarter dropped to $30.3 million, or 16 cents a share, from $32 million, or 17 cents, a year earlier. Lennar was expected to earn 16 cents a share, the average estimate of 14 analysts surveyed by Bloomberg.

The builder has been cutting costs and buying distressed real estate through Rialto Investments. The unit had operating earnings of $6 million in the fourth quarter, down from $25.1 million a year earlier. Rialto’s revenue climbed to $46.5 million from $19.7 million. The unit’s earnings declined as Rialto reported mark-to-market unrealized losses of $7.6 million related to a portfolio of investments in the U.S. Treasury’s Public Private Investment Program, which finances purchases of distressed mortgage securities.

Gross margin on home sales, a measure of profitability, widened to 21.6 percent from 20.8 percent and the average price rose 2 percent to $243,000, Lennar said.

“Each of the company’s operating segments was profitable despite challenging housing-market conditions, and its homebuilding operations performed slightly ahead of our expectations,” Vincent Foley, senior research analyst with Barclays Capital Inc. in New York, said in a note to investors.

Lennar is the largest U.S. homebuilder by revenue after PulteGroup and D.R. Horton.