Feb. 26 (Bloomberg) -- U.S. home prices plummeted at the end of last year and bank seizures of property almost doubled in January, indicating the housing slump is deepening.

Home prices had their biggest fourth-quarter drop since 1991, the Office of Federal Housing Enterprise Oversight said today. The S&P/Case-Shiller home-price index showed prices in 20 metropolitan areas fell in December by the most on record. Repossessions rose 90 percent to 45,327 last month from the same period a year ago, said RealtyTrac Inc., a seller of foreclosure statistics.

``All the news we're getting is pretty dark,'' said Celia Chen, director of housing economics for Moody's Economy.com in West Chester, Pennsylvania, in an interview. ``Prices will continue to fall for the rest of this year because increasing foreclosures in turn increase inventories.''

The worst U.S. housing decline in more than two decades is moving into its third year as buyers find it tougher to get mortgages and foreclosures add to the glut of unsold homes. Banks may resell as many as 1 million repossessed properties this year, forcing prices down even further, said Rick Sharga, RealtyTrac's executive vice president.

President George W. Bush's proposal to help 1 million subprime borrowers avoid foreclosure with tax-exempt bonds is doing little to slow the increase in defaults and two interest rate cuts by the Federal Reserve in January have failed to bring mortgage rates down.

Foreclosures Jump

State housing agencies are turning away many applicants because their homes have lost too much value or they've accumulated too much debt, according to estimates from Geoffrey Cooper, emerging markets director at a unit of MGIC Investment Co., the country's biggest mortgage insurer.

Total foreclosure filings in January, which include default and auction notices as well as bank seizures, increased 57 percent, Irvine, California-base RealtyTrac said.

More than 233,000 properties were in default or foreclosure last month. Total filings increased 8 percent in January from December, RealtyTrac said in a statement. More than 1 percent of U.S. households were in some stage of foreclosure during 2007.

Seasonally adjusted prices for existing single-family homes in the quarter fell an average of 1.3 percent from the previous three months, the Washington-based office known as Ofheo said. Prices fell 0.3 percent between the second and third quarters of last year, Ofheo said.

`Locked Out'

``A lot of buyers are simply locked out of the market because lending standards have really tightened in the past four months,'' said Delores Conway, director of the Casden Economic Forecast at the University of Southern California Lusk Center for Real Estate in Los Angeles. ``The no-down-payment loans have disappeared. People have to put money down now. It's back to basics.''

California, with an index price decline of 6.6 percent, led all states, Ofheo said. It was followed by Nevada (5.9 percent), Florida (4.7 percent) and Michigan (4.3 percent).

All 20 metropolitan areas with the greatest price declines in 2007 were in those four states, according to Ofheo. The top three were in California: Merced (19 percent), Modesto (15.5 percent), and Stockton (15.3 percent), Ofheo said.

The seasonally adjusted price for existing single-family homes in December fell 1 percent to $221,100 from a year earlier, according to Ofheo.

Prices Decline

The S&P/Case-Shiller home-price index dropped 9.1 percent from December 2006, after a 7.7 percent decrease in November. Nationwide, home prices fell 8.9 percent in the fourth quarter from a year earlier, the biggest decline in 20 years of record keeping. December's drop was the 12th in a row.

``It's inevitable that prices will decline a lot more in 2008 because inventory is so high,'' said Patrick Newport, an economist at Global Insight Inc. in Lexington, Massachusetts.

The S&P home price index was forecast to decline 9.7 percent, according to the median forecast of 10 economists surveyed by Bloomberg. Estimates ranged from declines of 8.5 percent to 10.4 percent.

All but three of the 20 metropolitan areas in the index showed year-over-year declines in prices in December, led by a 17.5 percent decrease in Miami and drops of 15.3 percent in Las Vegas and Phoenix. Prices rose in Seattle, Charlotte and Portland, Oregon.

Banks Get House

Defaults among subprime borrowers and those unable to meet rising payments on adjustable-rate loans drove foreclosure filings to the highest since August and the second-highest since RealtyTrac started keeping records three years ago. About $460 billion of adjustable mortgages are scheduled to reset this year, according to New York-based analysts at Citigroup Inc., which will raise minimum payments for borrowers.

``The most troubling thing is that we are seeing more and more of these properties actually going all the way through the process and going back to the banks,'' said Sharga.

Falling prices have trapped many homeowners who would like to sell or refinance their houses because they owe more money on them than the homes are now worth.

Nevada, California and Florida recorded the highest foreclosure rates among the 50 states, RealtyTrac said.

The rate of foreclosure filings in Nevada continued to lead the nation, with 6,087 properties in default or having been repossessed. That's 95 percent more than in January 2007 and 45 percent less than in December.

California, Florida Lead

California had the highest total number of default and foreclosures with 57,158 properties facing possible seizure last month. That was more than double the year-earlier figure and was up 7 percent from December.

Florida had the second-highest number of homes in default or foreclosure with 30,178 in January, more than double the figure for the prior year and 3 percent less than in December.

Arizona, Colorado, Massachusetts, Georgia, Connecticut, Ohio and Michigan rounded out the top 10 states worst off in terms of missed payments and property seizures, RealtyTrac said.

Cape Coral-Fort Myers, Florida, had the highest January foreclosure rate among 229 metropolitan areas. Stockton, California, had the second highest, followed by the Riverside-San Bernardino area.

New Jersey ranked 18th in terms of the proportion of households at some stage of default or seizure, with 0.15 percent. New York was 30th with 0.06 percent of households facing possible foreclosure.

To contact the reporters on this story: Sharon L. Lynch in New York at sllynch@bloomberg.net; Bob Ivry in New York at bivry@bloomberg.net.

Last Updated: February 26, 2008 14:44 EST