Home prices in the US fell another 1% in August, and tumbled a record 16.6% in the past year, according to the S&P/Case-Shiller Home Price Index. The index, which tracks the values of homes from 20 different metropolitan areas in the US, has fallen 20.3% from its peak in June 2006. 16 of the 20 cities reported depreciation in prices for August, while all 20 reported declines in the last year.

This is a positive step in the arduous recovery of the housing market. Although a decline in the value of any asset is painful, it is a necessary step in the recovery process, as excesses in the marketplace must return to equilibrium. As reported in an earlier post, as prices fall, sales rise, decreasing inventories.

Here’s how prices in the 20 cities performed in the past year (via MarketWatch):

Phoenix, down 30.7%; Las Vegas, down 30.6%; Miami, down 28.1%; San Francisco, down 27.3%; Los Angeles, down 26.7%; San Diego, down 25.8%; Tampa, down 18.1%, Detroit, down 17.2%; Washington, down 15.4%; Minneapolis, down 13.8%; Chicago, down 9.8%; Seattle, down 8.8%; Atlanta, down 8.5%; Portland, down 7.6%; New York, down 6.9%; Cleveland, down 6.6%; Denver, down 5.1%; Boston, down 4.7%; Charlotte, down 2.8%; Dallas, down 2.7%.

See Full Report.