Mortgage Payments Soar, Locking Many Out Of Housing Market

Hawaiʻi’s current housing market is inhospitable to both would-be homebuyers and sellers looking to offload a house, according to recent data from real estate platforms Zillow and Redfin.

Mortgage rates have roughly doubled in some cities, homes are spending as much as twice as long on the market and the vast majority of houses are selling for under the asking price.

Urban Honolulu was already the 4th least affordable metro area in the U.S. in 2024, with a house price-to-income ratio only surpassed by three California cities, according to the Pew Research Center. High housing prices also meant that mortgage debt per capita was 54% higher in Hawaiʻi than the rest of the country that year, according to the state’s Department of Business, Economic Development and Tourism.

The current economic climate is putting even more of a damper on the housing market. The U.S. Federal Reserve increased interest rates in September, a change that typically results in mortgage rates following suit. Rising costs already are sidelining potential buyers from participating in the housing market and sellers are questioning whether it’s the right time to put a home on the market, although so far, data shows many sellers remain undeterred.

Combined that means that for many Hawaiʻi residents, home ownership seems more out of reach than ever.

Mortgage Costs On The Rise

The federal reserve increased interest rates in September, causing an increase in mortgage rates and making it harder for people to afford to buy a home. The typical mortgage rate in Hawaiʻi is now almost 7% for a 30-year fixed mortgage. 

For hopeful homebuyers, higher interest rates translate into steeper monthly mortgage payments. The estimated cost of paying down a typical mortgage for a home in Honolulu went from $2,401 a month for purchases made in September 2019 to $4,493 in September 2026 – an 87% increase, according to data from Zillow. In Kahului on Maui, the increase has been even steeper. Seven years ago, the typical estimated typical mortgage payment was about $2,461 a month. Now it’s more than double at $5,155. 

That jump in the monthly bill is not only making people second guess whether it’s the right time to take out a mortgage. Higher interest rates can also disqualify people who would have had no trouble getting a loan in the past. According to a study by the Federal Reserve Bank of St. Louis, even people with sufficient income and stable employment can fail to meet the underwriting thresholds for a loan just because the increased interest rate raised their anticipated monthly payment beyond what they can easily pay.

Housing Stock On Neighbor Islands Remains Relatively Steady

The steeper costs for homebuyers hasn’t necessarily deterred sellers from putting homes on the market. The number of active listings on average each month have gone up across the state since 2023, when home sales nationally reached a near 30-year low.

Kahului on Maui had the most pronounced increase with an average of 1,558 homes on the market between January and September 2026 – an 82% jump from just 854 homes during the same period in 2023, according to Redfin data. In Hilo, there were about 425 more active listings in the average month this year compared to three years ago – a 38% increase. Both Honolulu and Kapaʻa on Kauaʻi have seen the average number of homes on the market each month increase by about 25% with 818 and 70 more homes, respectively. 

But that is hardly a sign that the housing market is back to pre-pandemic trends. Average monthly active listings are still falling short of 2019 numbers for all four cities where Redfin provides data. In Honolulu, there are 621 fewer homes on the market each month compared to 2019. In Hilo and Kapaʻa, active listings are short of the 2019 monthly average by about 176 and 84 homes, respectively. 

Only Maui has nearly bounced back, just four homes shy of the average number of active listings in 2019. 

Homes Linger On The Market 

These factors mean the days of the pandemic-era housing market craze where homes sold above asking price in a matter of days are a thing of the past. Redfin data shows homes now stay on the market longer.

Homes in Hilo have been on the market for an average of three and a half months, according to the latest data from this September. That’s more than a month longer than in July 2022 when homes were selling the fastest since at least 2019. 

In February, homes in Honolulu were under a sales contract within 98 days on average – three months and one week – although that fell to 77 days by September. That is still much longer than in March 2022, when homes averaged just 45 days on the market. 

In March 2022, homes in Kahului on Maui took about 55 days to go under contract. That more than doubled in September. Now homes are spending 135 days – almost four and a half months – on the market. The wait is even longer in Kapaʻa on Kauaʻi, where homes averaged 139 days on the market in September. 

Most Sell For Below Asking

In the current climate, it’s no wonder sellers are accepting bids far below asking price. 

About two-thirds of homes that exchanged hands in Hilo and Honolulu in September sold for below the original list price, sometimes by thousands of dollars, according to Redfin data. The median sale price was $496,888 in Hilo and $758,303 in Honolulu. 

In cities on Maui and Kauaʻi, the typical home costs more – and more of them are selling for under asking. The median sales price for homes sold in September was roughly $935,000 in Kahului and almost $997,000 in Kapaʻa. But in both cities, about 84% of homes had sold for less than sellers had originally listed. 

Home prices are still up significantly from years past. On Kauaʻi, the average home in Kapaʻa that sold this September was nearly twice as expensive as a home sold in 2019. On Maui, sales prices in Kahului this September were up around 39% from the cost in 2019. Homes are also selling for more in Hilo and Honolulu, although by narrower margins.