Confidence among U.S. homebuilders rose for a second straight month, the first back-to-back increase in almost a year, as signs emerged that lower house prices attracted more buyers.

The National Association of Home Builders/Wells Fargo index of builder sentiment increased to 20, from 19 in January, the Washington-based group said Tuesday. The index in December reached 18, the lowest since it was first published in January 1985. Levels lower than 50 mean most respondents view conditions as poor.

"We're still at a very low level but we're moving in the right direction," said Michelle Meyer, an economist at Lehman Bros. Holdings in New York, who correctly forecast the index. "The increase in buyer traffic suggests that some people are somewhat intrigued by lower prices and lower interest rates. However, it's not showing through to higher sales."

Federal Reserve officials anticipate that homebuilders will take most of the year to work off inventories of unsold homes and start contributing to economic growth. Builders are struggling as lenders increase restrictions and potential buyers hold out for lower prices.

Economists had forecast the index would stay at 19, according to the median of 28 projections in a Bloomberg News survey. Estimates ranged from 17 to 22. The gauge averaged 27 last year.

The builder survey asks members to characterize current sales as "good," "fair" or "poor," and to gauge prospective buyers' traffic. The survey also asks participants to assess the outlook for the next six months.

The index, which peaked at 78 in December 1998, has dropped in six of the nine years since then.

This month's improvement reflected signs of more buyers. The index of buyer traffic rose to 19, from 14 a month earlier and the highest reading since July. The group's measure of current single-family home sales increased to 20, from 19 in January.

"Some potential buyers who have been sitting on the sidelines are starting to at least research a new-home purchase, given improving affordability factors and the large selection of units on the market," NAHB Chief Economist David Seiders said.

Regionally, sentiment rose to 24 in the Northeast, 15 the West and 24 in the South. Builder sentiment in the Midwest was unchanged at 16, the report showed.

A Commerce Department report today may show housing starts in the United States remained near a 16-year low in January, according to the median estimate in a Bloomberg survey of economists.