Jan. 29 (Bloomberg) -- Home prices in 20 U.S. metropolitan areas fell in November for the 11th month in a row, as foreclosures and a slump in sales added to the glut of unsold properties.

Prices fell 7.7 percent from a year earlier after dropping 6.1 percent in October, according to the S&P/Case-Shiller home- price index. The decline is the biggest since the 20-city index was started in 2000.

Rising foreclosures will put more homes on the market and push prices down further, economists said. Housing will remain a drag on growth in coming months and increase pressure on Federal Reserve policy makers, who are meeting today and tomorrow, to cut interest rates.

``The housing market is going to continue to look quite dismal for some time as the imbalances are worked out,'' said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York.

A government report today showed orders for U.S.-made durable goods rose more than forecast in December, suggesting business investment is holding up even as other parts of the economy weaken.

The 5.2 percent increase in orders was the biggest since July and followed a revised 0.5 percent gain in November that was greater than previously reported, the Commerce Department said today in Washington. Excluding transportation, demand rose 2.6 percent.

Economists' Estimates

Economists expected the home-price index to drop 7.1 percent, according to the median of 14 forecasts in a Bloomberg News survey. Estimates of the decline ranged from 6 percent to 8 percent.

Compared with a month earlier, home prices fell 2.1 percent. The figures aren't seasonally adjusted, so economists prefer to focus on the year-over-year change.

The index is a composite of transactions in 20 metropolitan areas. Seventeen cities showed a drop in prices from a year earlier, led by a 15 percent decline in Miami. Three cities, Charlotte, North Carolina, Portland, Oregon, and Seattle, showed increases.

Compared with a month earlier, all 20 cities in the survey showed a decline.

``We are in an historic housing bust right now,'' Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, said in a television interview.

Shiller and Karl Case, an economics professor at Wellesley College, created the home-price index based on research from the 1980s.

Record Decline

The group's 10-city composite index, which has a longer history, fell a record 8.4 percent in the 12 months ended in November. The decline is ``probably'' the biggest since ``some time around World War II,'' Shiller said.

Separate reports are showing prices continued to decline in December. The National Association of Realtors said Jan. 24 that the median sales price of existing homes fell 6 percent in December from a year earlier. The resale price of single-family homes for all of 2007 dropped 1.8 percent and was the first decline since records began four decades ago and probably the first since the Great Depression in the 1930s, the group said.

``We're dealing with a buyers' market and buyers are expecting prices to fall further,'' Jonathan Basile, an economist at Credit Suisse Holdings Inc. in New York, said before the report. ``We don't expect a recovery in housing this year.''

The median price of a new home fell 10 percent in December from the same month a year earlier, the Commerce Department said yesterday.

Ryland's Loss

The U.S. housing market is the ``worst in 30 years,'' Ryland Group Inc. Chief Executive Officer Chad Dreier said on a conference call on Jan. 24.

Ryland, a Calabasas, California-based homebuilder, reported a fiscal fourth-quarter net loss of $201.9 million on Jan. 23, more than analysts had forecast. Dreier said the following day the housing market is ``too uncertain'' to offer an outlook and that the company will continue to offer ``big incentives'' to potential buyers in California.

Lennar Corp., the biggest U.S. homebuilder, reported the largest quarterly loss in its history on Jan. 24. New orders for the period ended Nov. 30 fell 50 percent to 4,761 and the average sales price declined 3.6 percent to $291,000 as the company offered greater sales incentives.

Futures markets indicate traders expect Fed policy makers to cut the benchmark overnight lending rate between banks by as much as half a percentage point tomorrow at the conclusion of the Federal Open Market Committee meeting. The central bank last week lowered the rate by three-quarters of a percentage point in the first emergency action since 2001.

The housing slump ``may continue to be a drag on growth for a good part of this year,'' Fed Chairman Ben S. Bernanke testified to the House Budget Committee on Jan. 17.

To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net

Last Updated: January 29, 2008 14:18 EST