Horsham, Pa.-based Toll Brothers, the largest U.S. builder of luxury homes, today reported a 21 percent decline in third-quarter revenue and said that mortgage market troubles may delay a recovery in the weak housing market.

Revenue came in at $1.21 billion for the quarter ended July 31, according to preliminary results, compared to $1.53 billion for the same period last year.

Backlog declined 34 percent to approximately $3.67 billion, while signed contracts dropped 31 percent to about $727.1 million. In addition, third-quarter cancellations increased 24 percent, from 19 percent the previous quarter.

“Hesitant customers remain on the sidelines, unsure of whether home prices have bottomed,” CEO Robert Toll said in a statement. “The pace of home sales could slow further until the credit markets settle down.”