Is Affordability at Its Lowest Point? What It Means for Hawai‘i Homebuyers

For many families in Hawai‘i, the dream of homeownership feels further away than ever. Recent data highlights a sobering reality: only 20% of Hawai‘i households can currently afford the state’s median-priced single-family home, which now sits at over $1.1 million. Just a few years ago, in 2021, that figure was 44%—nearly half of households. The dramatic drop underscores how quickly affordability has eroded, leaving buyers wondering if owning a home in Hawai‘i is even possible.

Why Affordability Has Declined So Sharply

Several factors have collided to create this affordability crisis:

1. Rising Home Prices – Hawai‘i has long been one of the nation’s most expensive housing markets due to limited land, high demand, and construction costs. Over the last decade, median home prices have climbed steadily, with significant jumps during and after the pandemic as off-island buyers sought second homes and remote lifestyles.

2. Higher Mortgage Rates – Interest rates, which hovered near historic lows in 2021, have risen sharply in the last two years. Even a 1% increase in mortgage rates can add hundreds of dollars to a monthly payment, pricing out many would-be buyers.

3. Stagnant Wages – While home prices and mortgage rates soared, wage growth in Hawai‘i has not kept pace. This gap between income and housing costs means fewer households can qualify for conventional financing.

The combination of these pressures has pushed affordability to one of its lowest points in recent history.

What This Means for Buyers

For potential buyers, these statistics are more than just numbers—they reflect real challenges in navigating today’s market. Here are a few key takeaways:

• Competition for Entry-Level Homes – With fewer buyers able to afford the median price, there is intense competition for homes at the lower end of the market. Properties under $700,000 often receive multiple offers and sell quickly.

• Expanded Search Areas – Buyers are looking beyond traditional hot spots like Kona or Waimea to find more affordable communities, including Pāhoa, Honoka‘a, and Ocean View. These hidden gems may offer better value while still delivering the island lifestyle.

• Creative Financing Solutions – Many households are turning to programs such as down payment assistance, first-time buyer loans, or VA loans to bridge the affordability gap. Working closely with a local lender can open doors buyers may not realize exist.

• Adjusting Expectations – Buyers may need to start with a smaller home, a fixer-upper, or a condo before moving up to their dream single-family home. Building equity step by step is often the most realistic path in today’s market.

What This Means for Sellers and Clients

For sellers, low affordability can feel like bad news—but it doesn’t mean demand has vanished. In fact, Hawai‘i’s limited inventory and ongoing desirability keep the market active. However, pricing strategy is more important than ever. Homes that are well-prepared and competitively priced continue to attract serious buyers, while overpriced listings may sit longer.

For real estate professionals and local clients, the focus has shifted to education and guidance. Buyers need to understand what’s realistic in their budget, while sellers need clear advice on positioning their homes to stand out in a market where fewer people can afford the median.

Looking Ahead

Affordability challenges won’t disappear overnight. Interest rates may soften, but without significant wage growth or new housing supply, the gap between what people earn and what homes cost will remain. The good news? Hawai‘i real estate has always been about playing the long game. For those willing to be strategic, patient, and creative, homeownership is still possible—even in today’s tough environment.