Hawaii leads nation in homeownership increase

Hawaii led the nation with a 1.2% increase in its rate of homeownership between 2010 to 2020, one of only five states with a positive rate change over the decade, according to the latest U.S. census.

Despite the progress, however, Hawaii, with its high cost of buying a home, remained a bottom-five state when it comes to the number of homes occupied by their owners.

Hawaii’s homeownership rate in 2020 was 58.8%.

The U.S. homeownership rate hit its lowest point in five decades, dropping by 2 percentage points to 63.1%, the Census Bureau said Thursday.

Forty-five states and the District of Columbia all experienced declining homeownership rates over the decade.

Not so in Hawaii, which pushed its homeownership rate to 58.8% from 57.5% — a 1.3 percentage-point difference. The Aloha State was followed by Alaska, Idaho, South Carolina and Wyoming, the only other states to see their rates rise over 10 years.

State chief economist Eugene Tian said construction of workforce housing as part of the condo boom in the Kakaako area starting in 2015 was largely responsible for pushing up the state’s homeownership rate.

Between 30% and 40% of those condominiums were priced for workforce housing, which is affordable to qualified working folks, often couples with two incomes or young professionals, Tian said.

But, he said, they are not considered affordable enough for most people.

“Affordability is still blocking people from owning their own homes,” Tian said. “Demand is strong. We need 10,000 new units a year based on pent-up demand, but a lot of people are doubling up with their parents.”

The low homeownership rate is reflected in the number of renters here. While renter-occupied housing accounts for 36.9% of housing nationwide, in Hawaii it’s 41.2%, according to the 2020 census.

What’s more, there are more vacant houses in Hawaii: 12.6% compared with the national average of 9.7%.

Real estate analyst Stephany Sofos said she suspects Hawaii’s homeownership rate was propped up by a growing percentage of people, largely aging Asians, who were downsizing into a condominium and giving their homes to a son or daughter or even grandchild.

In addition, at the beginning of the COVID-19 pandemic, as census takers were still collecting data, scores of out-of-state buyers were snapping up homes in Hawaii, she said.

But with the median price of homes in Honolulu at $1 million, homeownership remains elusive to many.

“On the mainland you can get a bigger home, on a bigger lot, at a third of the price. Here your million-­dollar home is 60 years old, single-wall construction and in need of new plumbing,” Sofos said.

In a statement, Fran Villarmia-Kahawai, president of the Honolulu Board of Realtors, said: “We’re pleased to see Hawai‘i lead the nation in increasing our homeownership rate — and proud of our members’ contributions that may have supported this trend — but we still have more work to do.

“Currently, our biggest challenge is growing our housing inventory, especially in the affordable price points,” said Villarmia-­Kahawai, who added that the board’s focus “will continue to be on both seeking policy change allowing more affordable and workforce housing to be built while educating local residents on how homeownership can be possible.”

Reina Miyamoto, executive director of the Hawaii HomeOwnership Center nonprofit, said interest rates remained quite low during the 2011-2020 period, offering opportunities for buying a home even in Hawaii’s high-cost housing market.

Miyamoto said there was also increasing awareness of buyer-assistance programs.

“While there are no statistics related to this, based on calls we receive, buyers are more frequently searching the internet for programs that can help them into homeownership,” Miyamoto said in an email.

Tian said 2020 census data suggests fewer people were getting married and having children over the decade, and thus there may have been less incentive for them to own their own homes.

According to census data, the percentage of married-­couple households declined to 49.0% from 50.5% of households, and the percentage of married couples with children also dropped. In 2010, 39.8% of married couples had children under the age of 18, while there were only 35.4% of married couples with children under the age of 18 in 2020.

The graying of the population was also reflected in the housing data.

Overall, the percentage of households with someone 65 and over living in them increased by 9.3 points, while the percentage of households with a senior living alone increased by 2.7 points — to 10.8% in 2020 from 8.1% in 2010.