WASHINGTON (Bloomberg) — Confidence among US homebuilders unexpectedly rose this month to the highest since June, an industry survey showed yesterday, a sign the housing market may begin to recover this year.The National Association of Home Builders/Wells Fargo index of sentiment rose to 40 this month from 35 in January and a 15- year low of 30 in September, the Washington-based association said yesterday. A reading below 50 means most respondents view conditions as poor.

Home sales gained in two of the last three months of 2006, raising hopes the current housing downturn may have touched bottom. Still, near-record numbers of unsold homes are forcing sellers to cut prices and builders to scale back new projects, suggesting that home construction will languish for months.

“Builders are starting to see the light at the end of the tunnel,” said Stephen Stanley, chief economist at RBS Greenwich Capital Markets in Greenwich, Connecticut. “Sales seem to have stabilised and mortgage applications have picked up. There are signs the free-fall in demand for homes has been arrested.”

The index was forecast to remain at 35, according to the median estimate in a Bloomberg News survey of 32 economists. Estimates ranged from 31 to 36. The index averaged 42 last year.

The confidence survey asks builders to say whether sales are “good,” “fair” or “poor” and to gauge prospective buyers’ traffic.

A measure of sales expectations for the next six months jumped to 55 from 48, the first time since June that more builders were optimistic than pessimistic about future sales.