Housing affordability mainly eroded in Hawaii last year, according to a study that also revealed a sliver of improvement for one aspect of the state’s residential real estate market.
It took more income to afford the median rent for a place to live or to buy a median-priced single-family house in 2024, according to the study published Wednesday by the University of Hawaii Economic Research Organization.
But it took a little less income to buy a median-priced condominium, the study noted.
Justin Tyndall, a UHERO associate professor who helped author the report, said during a news conference that the statewide median condo sale price in 2024 decreased by 6% to $600,000 from about $640,000 a year earlier.
As a result, it took 126% of the median Hawaii household income to afford a median-priced condo last year, down from 138% in 2023 and level with 2022, after factoring annual changes in mortgage rates and personal income.
“If we look over the last year, we’re sort of in a better place than we were,” Tyndall said. “There’s more people out there who would be able to afford that first condominium than there were a year ago because prices are down a little bit.”
Tyndall however noted that one reason for the condo price decline was caused by spikes in the cost of condo association insurance that makes monthly maintenance fees higher and depressed buyer demand, a situation that he described as “bad news hidden within that good news.”
Another factor contributing to the condo price decline was significant new condo construction, Tyndall said.
Generally, UHERO’s report said the state remains in a severe housing crisis.
The last time Hawaii’s median household income was enough or more than enough to afford a median-priced condo was 2021.
To afford a median-priced Hawaii single-family home that rose 6% to $950,000 in 2024 from the year before, UHERO’s report said it took 189% of the median household income, up from 186% in 2023.
The last time a Hawaii household earning the median income could afford a median-priced single-family home was 2012, according to UHERO, which assumes a 30-year fixed-rate mortgage and a 20% down payment.
For rental housing in Hawaii, it took 85% of the median household income to afford the median rent in 2024, according to the report, up from 82% a year earlier.
This change in rent relative to household income includes a sharp impact from Maui’s housing market where the August 2023 wildfire disaster that destroyed around 3,500 homes led to rent increases of 50% to 60% for many fire survivors.
The report said more recent UHERO survey data shows the median rent that fire-affected renters paid for one- and two-bedroom units declined by 10% to 20% in the first quarter of this year while rental rates for units with three or more bedrooms remained elevated.
UHERO’s report said Hawaii previously had the highest median rent in the nation, but now ranks second behind California. This ranking is based on the most recent U.S. Census Bureau data for 2019 to 2023, and estimates California’s monthly median rent was $1,956 compared with $1,938 for Hawaii.
Overall, relatively anemic construction of new housing in Hawaii is a major driver of the worsening general condition of affordability, according to UHERO.
Tyndall said there has been progressively less housing built statewide every decade since the 1970s.
“We’re not building enough housing,” he said, citing some reasons for this as slow permitting, costly infrastructure and political opposition to projects such as a workforce housing proposal for Kakaako Makai earlier this year. “The bottom line is we need to build more housing.”
By the numbers
More 2024 Hawaii housing market conditions:
6%
Short-term rentals that make up the state’s housing stock
20%
Single-family home purchases on neighbor islands by non-Hawaii residents
31%
Statewide condo purchases by non-Hawaii residents
80.5
Hawaii’s homeless per 10,000 residents.The rate was higher than any other state, right above New York at 79.5 and far higher than the national average of 22.6.
3 times
Hawaii home prices compared with the national median. Hawaii tops the next most-expensive state, California, by 16%.
Source: UHERO
