Home prices increased the most in Chicago

Even though the housing market is in a deep slowdown, price increases on a national level are picking up steam.

Las Vegas is seeing the biggest drop in home prices among the nation's biggest cities.

Nationally, home prices are showing signs of accelerating, but many markets, particularly in the West and in the South, are still seeing big price drops.

Even though the housing market is in a deep slowdown, price increases on a national level are picking up steam. Nationally, prices went up 1.1% in May as compared with year ago, according to new data from the S&P Cotality Case-Shiller Index. The increase was faster than last month's annual gain of 0.9%.

Prices are also rising slightly faster in America's biggest cities. Homes in the 20-city index posted a 1.6% annual gain in May, up from a 1.2% increase the previous month.

Yet many markets are still seeing home prices fall as inventory piles up, especially in the Mountain West and the Sun Belt.

Among the 20 cities in the index, Las Vegas saw home prices drop the most - they were 1.9% lower this May as compared with last year. Seattle saw the second-largest drop, down 1.8% year over year, followed by Denver and Tampa.

A sharp rise in for-sale listings is one reason Las Vegas is seeing home prices fall. Active listings in Las Vegas rose 3.4% in June as compared with a year ago, according to a separate report by real-estate platform Realtor.com.

The jump in active listings in Vegas is much larger than the national gain in housing inventory of1.9%. New listings were also up 3.2%. Active listings refers to all the homes on the market, while new listings are homes that have just gone up for sale.

The median list price of a home in Las Vegas was about $474,950, according to the Realtor.com analysis. It also found that 23.3% of homes for sale in Vegas had seen a price reduction.

(Realtor.com is operated by News Corp subsidiary Move Inc.; MarketWatch publisher Dow Jones is also a subsidiary of News Corp.)

The average Las Vegas home is also seeing a drop in valuation, falling 3.1% at the end of June as compared with the same month a year ago, according to Zillow.

On the flip side, home prices were up sharply in Chicago, New York and Cleveland. In Chicago, home prices were up 6.9% this May as compared with a year ago.

"This divergence may reflect shifting post-pandemic housing dynamics, including a growing return-to-office mandate that appears to be supporting traditional urban markets," Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices, said in a statement.

The Case-Shiller data also highlight how housing inventory, or the number of homes for sale on the market, is one of the most important factors affecting home prices, Lisa Sturtevant, chief economist at Bright MLS, said in a statement.

"In most Midwest and Northeast markets, where inventory is low and new construction is limited, prices are still being pushed up. The [artificial-intelligence] boom is fueling price growth in San Francisco, making it its own unique marketplace," she said.

"But in much of the South and the West, rising inventory and cooling demand has put the brakes on home-price appreciation," she added.

-Aarthi Swaminathan