Housing market outlook: National home prices just broke another record for the 9th time in 12 months 

“This month’s report boasts another all-time high,” Brian D. Luke, head of commodities, real & digital assets at S&P Dow Jones Indices, said in the release. “We’ve witnessed records repeatedly break in both stock and housing markets over the past year.”

The 10-city composite saw an increase of 8.2% from the prior year, and the 20-city composite saw an increase of 7.4%. Of those 20 major cities, San Diego saw its home prices rise the most, reporting an 11.1% increase in March compared to a year earlier, which Luke called an “impressive” gain. New York was next, with its home prices rising 9.2%. 

“Regionally, the Northeast remains the top performer with an 8.3% annual gain, showcasing robust growth compared to other metro markets,” Luke said. “Conversely, cities like Tampa, Phoenix, and Dallas, which saw top-tier performance in 2020 and 2021, are now growing at a slower pace.”

That reverses the early-pandemic trend, which saw a surge in home prices in Sunbelt markets. “COVID was a boom for Sunbelt markets, but the bigger gains the last couple of years have been the northern metro cities,” Luke noted. “On a seasonal adjusted basis, national home prices have reached their ninth all-time high within the past year, with all 20 metropolitan markets posting positive annual gains for the fourth consecutive month, indicating widespread and sustained growth in the housing sector.”

It’s not just home prices—the Sunbelt is seeing some of the biggest rent declines, too, according to Redfin. It’s no secret why rents are falling and home prices are moderating, because they’re building more homes.

“The Sunbelt has built a ton of new apartments in recent years, partly to meet the surge in demand brought on by the flood of people who moved in during the pandemic housing boom. But the boom is over, and now property owners are struggling to fill vacancies, which is causing rents to fall,” Redfin’s senior economist, Sheharyar Bokhari, said in a recent analysis. “The good news is that the uptick in housing supply in the Sunbelt has improved affordability for renters, which can be a lesson for other American cities grappling with housing affordability challenges.”

In 2022, San Diego approved just 5,314 new homes for construction, according to the city’s annual report. The city needs 108,036 new homes to meet its target for the current cycle ending 2029; in the last two years, it only met 10% of its eight-year housing goal. Its home prices are almost triple the national average, per Zillow, and rents are 42% higher than the national median. And as the latest data released today shows, its home prices rose more than any other city. The only way to solve the problem is by building homes, as Redfin’s chief executive, Glenn Kelman, previously told Fortune.

“There has been a structural imbalance between demand and supply for decades,” Bright MLS’ chief economist, Dr. Lisa Sturtevant, said in a statement following today’s release. “The shortfall feels even more acute now as the large millennial population is squarely in its first-time homebuying years while baby boomers are staying in their homes longer. Homebuilding activity has ramped up, but the pace of new housing starts is not enough to remedy the housing deficit. Furthermore, the location of new housing construction activity is not always where the needs are greatest.”

Apart from home prices, mortgage rates are substantially higher than they were throughout the pandemic and years before. As of the latest reading, the average 30-year fixed mortgage rate is sitting at 7.14%. There is a hope rates will cool down through the rest of this year, but even if they do, it’s unlikely to reverse the level of deterioration in housing affordability since the pandemic, where the salary Americans need to buy a starter home has almost doubled over the last four years, the cost of owning a home is the highest on record, and renters need to make almost $80,000 to afford the typical rent.