WASHINGTON (Bloomberg) - Home prices in 20 US metropolitan areas fell in January by the most on record, a sign the housing recession is deepening, a private survey showed yesterday.

The S&P/Case-Shiller home-price index dropped 10.7 percent from January 2007, after a nine-percent year-on-year decrease through December 2007. The gauge has fallen for 13 consecutive months.

Price declines will continue as foreclosures add to a glut of unsold properties, and stricter lending rules make it harder to get financing. Declining values leave homeowners feeling less wealthy and with less home equity to borrow against, undermining consumer spending and pushing the economy closer to a recession.

"The tremendous price weakness is likely to be a factor that significantly depresses consumer spending," said Joe LaVorgna, chief US economist at Deutsche Bank Securities Inc. in New York.

The home-price index was forecast to decline 10.5 percent, according to the median estimate of 18 economists surveyed by Bloomberg News.

Projections ranged from declines of 9.5 percent to 11 percent. Case-Shiller began compiling year-over-year records on the 20-cities index in 2001.

January home prices fell 2.4 percent from a month earlier, following a 2.1 percent decline the prior month, the Case- Shiller report showed. The figures are not adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of month-to-month.

All but one of the 20 cities in the index showed year-over-year declines in prices in January, led by drops of 19.3 percent in Las Vegas and Miami. Prices rose in Charlotte.

Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, and Karl Case, an economics professor at Wellesley College, created the home-price index based on research from the 1980s.

Lehman Brothers Holdings Inc. forecasts home prices as measured by Case-Shiller will decline another 10 percent by the end of 2009.

It predicts new-home sales will bottom in the middle of this year and existing-home sales and housing starts will reach a trough in the third quarter.

"Prices have reached what might be called a fair value," Dan North, chief US economist at Euler Hermes ACI in Owings Mills, Maryland, said in a Bloomberg Television interview before the report. "However, prices have still got to go substantially past that" to trigger demand and a recovery.

A separate report from the Office of Federal Housing Enterprise yesterday showed home values fell three percent in January from a year ago, and 1.1 percent from December.

The S&P/Case-Shiller index measures repeat home sales in 20 US cities, regardless of mortgage size, while the Ofheo monthly index excludes sales of homes with mortgages higher than $417,000, the maximum allowed during that time for homes bought by government-chartered Fannie Mae and Freddie Mac.

US home foreclosure filings jumped 60 percent and bank seizures more than doubled in February as rates on adjustable mortgages rose and property owners could not sell or refinance as prices fall, Irvine, California-based RealtyTrac Inc., a seller of foreclosure data, said on March 13.

About $460 billion of adjustable-rate mortgages are scheduled to reset this year, according to analysts at Citigroup Inc.