Home prices keep on soaring as demand outpaces supply and homeowners refuse to give up low interest rates.

According to new data from S&P CoreLogic Case-Schiller, home prices rose 6.5% in March from a year earlier and by 1.3% on a monthly basis.

It’s the ninth time in the past 12 months that national home prices have broken previous records.

“This month’s report boasts another all-time high,” said Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices.

“We’ve witnessed records repeatedly break in both stock and housing markets over the past year.”

The data looked at a 10-city composite that saw an increase of 8.2% from the prior year, while the 20-city composite saw an increase of 7.4%.

Of the 20 major cities surveyed, San Diego saw its home prices rise the most—with an 11.1% increase in March compared to a year earlier.

New York State is next in line with a 9.2% increase.

”Regionally, the Northeast remains the top performer with an 8.3% annual gain, showcasing robust growth compared to other metro markets,” Luke said.

Top performing cities that saw increases in 2020 and 2021 like Tampa, Phoenix, and Dallas are now growing at a slower pace compared with their Northern counterparts.

A lack of inventory

A lack of inventory is one of the biggest culprits of record home prices across Southern cities.

In 2022, San Diego approved just 5,314 new homes for construction — far below the 108,036 needed by 2029 to meet its housing needs.

With so few homes being built and little supply on the market, San Diego’s home prices are triple the national average. Rent prices are 42% higher than the national median.

“There has been a structural imbalance between demand and supply for decades,” said Bright MLS’s chief economist, Dr. List Sturtevant.

“The shortfall feels even more acute now as the large millennial population is squarely in its first-time home buying years while baby boomers are staying in their homes longer.”

Sturtevant adds that while homebuilding has increased, new home starts haven’t kept pace with overarching demand, which has contributed to an unstable market.

Southern rentals on the decline

While prices rise in Southern cities like San Diego, they are in decline across many Sun Belt cities.

Nine of the top 10 metros facing the steepest drops in asking rents are across the Sun Belt—with Seattle as the only outlier, with a 7% year-over-year drop in April.

According to Redfin, the median asking rent rose 1% nationally to $1,648—the first increase in a year.

“The Sun Belt 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,” said Redfin senior economist Sheharyar Bokhari.

“But the boom is over, and now property owners are struggling to fill vacancies, which is causing rents to fall.”

Construction on new apartment buildings skyrocketed following the pandemic across the Sun Belt and much of the country. But that’s starting to cool.

”The good news is the uptick in housing supply in the Sun Belt has improved affordability for renters, which can be a lesson for other American cities grappling with housing affordability challenges,” Bokhari said.