April 24 (Bloomberg) -- Declines in home prices in 20 U.S. metropolitan areas accelerated in the 12 months ended in February, a private survey showed today.

Values fell 1 percent from February 2006 after dropping 0.1 percent in the year ended January, according to the S&P/Case- Shiller home-price index. January's decrease was the first since the group started keeping year-over-year records in 2001.

Slow demand has left a glut of homes for sale on the market that's forcing sellers to reduce prices, economists said. A rise in foreclosures may add to the number of unsold homes, suggesting prices will be slow to rebound and housing will continue to limit economic growth.

``There's just too much inventory of unsold homes, and simple supply and demand says that prices will have to come down,'' said Lindsey Piegza, a market analyst at FTN Financial in New York. ``We expect prices to be under continued downward pressure for a while.''

Sales of previously owned homes declined more than forecast in March to the lowest level in almost four years, the National Association of Realtors also said today in Washington. Purchases dropped 8.4 percent last month, the most since 1989, to an annual rate of 6.12 million.

A report from the New York-based Conference Board showed consumer confidence declined to the lowest level in eight months in April. The share of Americans who plan to buy a home in the next six months fell to 2.7 percent, the lowest since November 2004.

10-City Index

S&P/Case-Shiller's 10-city composite, which has a longer history, dropped 1.5 percent in the 12 months ended February, the most since October 1993.

Compared with a month earlier, home prices fell 0.5 percent following a 0.6 percent January decline. 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. Thirteen cities showed a year-over-year decline in prices, led by a 7.8 percent drop in Detroit and a 5 percent decline in San Diego. The area showing the biggest year-over- year gain was Seattle with an 11 percent increase.

``The decline in price is symptomatic of the continuing correction in the market from the oversupply in housing,'' said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado.

Detroit

Of the 20 areas covered, 15 showed declining home prices compared with January, while three showed an increase and two were unchanged. The biggest month-over-month drop was a 1.2 percent decline in Detroit, while the biggest gain was a 0.5 percent increase in Seattle.

A rise in mortgage defaults and rising foreclosures among subprime borrowers, or those with poor or limited credit histories, will cause U.S. home prices to fall this year for the first time on record, the National Association of Realtors said earlier this month.

The 2007 median price for an existing home likely will decline 0.7 percent to $220,300, the first drop since the real estate trade group began keeping records in 1968 and probably the first decline since the Great Depression, said Lawrence Yun, an economist with the Chicago-based association.

The median price for new homes is projected to increase 0.4 percent to $246,200 this year, the smallest gain since prices fell in 1991.

Orders Drop

Bloomfield Hills, Michigan-based Pulte Homes Inc., the fourth-largest U.S. homebuilder, said last week that new orders in the first quarter fell 21 percent to 8,499 compared with a year earlier.

``The operating environment for homebuilding continues to be challenging, with orders and closings remaining under pressure,'' Richard Dugas, Pulte's chief executive officer, said in the statement. ``While we experienced improvement in our cancellation rate compared with the fourth quarter, the housing market remains difficult.''

Housing markets including California, Florida and Arizona ``are becoming tougher'' for sellers, said Donald Tomnitz, chief executive officer of D.R. Horton Inc. the second-largest U.S. homebuilder.

``We're back to rock-bottom pricing in California,'' Tomnitz said on a conference call April 19.

The Realtors Association later this morning will release figures on March existing home sales. Resales fell to an annual rate of 6.40 million from 6.69 million in February, according to the median estimate in a Bloomberg News survey of economists.

The S&P/Case-Shiller index and another by the Office of Federal Housing Enterprise Oversight track the same home over time and more accurately reflect price trends, economists said.

The gauges from the Commerce Department and the Realtors group can be influenced by changes in the types of homes sold. Higher sales of cheaper homes relative to more-expensive properties will bias the figures down.

To contact the reporter on this story: Joe Richter in Washington at jrichter1@bloomberg.net

Last Updated: April 24, 2007 10:15 EDT