Relationship with sister?

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So, I need some help, big time.

>Me and sister live together
>A year between us, her being the older one, I'm 21, she is 22
>Grew up as best friends, always stayed that way, pretty inseparable, even through high school/early college
>Decided to split the cost of a place and move in together
>That was 6 months ago
>She has been doing stuff like cuddling me on the couch when we watch movies together
>Her hand just happened to lay on my crotch the whole time
>Walks around in her underwear (nothing I haven't seen but its like she is showing off now)
>She told me last night, the more time she spends with me, the more she "forgets I'm her brother, and the more she falls in love with me"

So I was sort of baffled she said that. And she apologized but said she had to put it out there, and hoped that it wouldn't ruin things between us. I'm slightly weirded out, but interested at the same time. Its an odd feel.

What am I supposed to do at this point? I know it isn't quite right, but I don't know how long I'll be able to put her off. My sister is quite attractive. In high school, and in college, guys were practically begging to get with her most of the time. And I've seen her in her underwear enough times recently to know she has a pretty fucking great body.

Is it so wrong that I should leave if I feel like something may come of this, or do I stick around and see where it goes?

God this shit is confusing.