U.S. homebuilder sentiment was unchanged in March to hold at the highest level since June 2007, while sentiment in February was revised lower, the National Association of Home Builders said on Monday.

The NAHB/Wells Fargo Housing Market index held steady at 28, the group said in a statement, shy of economists' expectations for 30.

February's reading was revised down to 28 from 29.

After stagnating in a tight range, the index has gained 14 points since September 2011, reinforcing optimism the housing market is finding a bottom.

Still, the index has a long way to go to the 50 mark that indicates more builders view market conditions as favorable than poor. The index has not been above 50 since April 2006.

"While builders are still very cautious at this time, there is a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving," Barry Rutenberg, chairman of the NAHB, said in a statement.

The single-family home sales component dipped to 29 from 30. The gauge of single-family sales expectations for the next six months climbed to 36 from 34, while prospective buyer traffic was unchanged at 22.