Home prices in the United States dropped 8.9% in the final quarter of 2007 compared with a year ago, Standard & Poor’s said today.

That’s the steepest decline in the 20-year history of S&P’s housing index.

The S&P/Case-Shiller home price indices, which include a quarterly index, a 20-city index and a 10-city index, reflect year-over-year declines in 17 metropolitan areas with double-digit declines in eight of them.

The 10-city index also set a record annual decline of 9.8% in December, while the 20-city index dropped 9.1%.

U.S. home prices also plunged 5.4% from the previous three-month period, by far the largest quarter-to-quarter decline in the index’s history. The previous record was the revised 1.8% drop in the third quarter of 2007.

The quarterly index tracks prices of existing-family homes nationwide compared with a year earlier.

Meanwhile, Irvine, Calif.-based RealtyTrac Inc. said Tuesday that the number of homes in the United States facing foreclosure climbed 57% in January from the previous year and more lenders are being forced to take possession of homes they couldn’t dump at auctions.