Economists say a shortage of housing is driving up housing costs, contributing to Hawaii’s high cost of living.

The state should focus on policies that encourage housing development, but that might attract more people to move to Hawaii, they told lawmakers Wednesday at a hearing at the state Capitol.

Hawaii has the second-highest consumer debt in the nation, and 77 percent of the debt is from mortgages, said Eugene Tian, chief economist for the state Department of Business, Economic Development and Tourism. Many homes in the state are being sold to investors on the mainland or abroad, he said.

“The situation is getting worse for neighbor islands. … Maui is leading the trend,” Tian said.

On Maui, 44 percent of single family homes and condominiums were sold to mainland residents between 2008 and 2016, and 49 percent were sold to local residents, he said. About 7 percent went to foreign investors.

On Kauai and Hawaii island, about 40 percent of homes go to mainland residents, Tian said. On Oahu, he said, 85 percent of homes were sold to Hawaii residents.

Honolulu has the most burdensome regulations when it comes to building housing, and the state should do everything it can to build more affordable housing, said Carl Bonham, executive director of the University of Hawaii Economic Research Organization.

“Even if we do that, we may not bring down the cost of living. … On the other hand, if we don’t do that, the cost could get worse,” Bonham said.

In 2003, the top 1 percent of homes in the state sold for $1 million or more, and in 2013, 10 percent of homes were sold in that price range, said Paul Brewbaker, principal of TZ Economics.

“By the early 2020s, you should expect a third or more of houses to be trading at $1 million or more,” Brewbaker said.