When Honolulu’s median sale price for single-family homes punched through the $800,000 ceiling in August, the big round number stunned many prospective homebuyers.

“That’s pretty crazy,” said Matt Orias, a Kaimuki resident who recently began looking to buy his first home, about the figure, which was equaled or topped in September and October.

But local economists say that what many people regard as a through-the-roof price is really still quite affordable by historical Hawaii standards when considering residents’ median income and interest rates.

In fact, housing prices prior to this decade have been more affordable only in two periods since the mid-1970s, according to Paul Brewbaker of Honolulu- based TZ Economics.

“It’s so bad (that) it’s about as good as it’s ever been,” said Brewbaker, a former Bank of Hawaii chief economist, during an affordable-housing conference at the state Capitol organized by state Sen. Stanley Chang (D, Diamond Head-Kahala- Hawaii Kai), last month. “There is no affordable- housing crisis in Honolulu. We are well within the affordability zone.”

The University of Hawaii Economic Research Organization has a similar view, and noted in a recent report the cost of home ownership in Hawaii today is lower than a decade ago.

“Most people don’t realize that,” said Carl Bonham, UHERO’s director. “They look at $800,000 and think: ‘Oh my God! That’s the highest ever.’”

A lot of things people buy cost more now than ever before because of inflation, but it doesn’t necessarily mean those things are less affordable than previously, Bonham explained.

In discussing housing affordability, Bonham and Brewbaker don’t mean to suggest Hawaii home prices are not high, and they recognize high home prices present difficulties for many local residents.

“Housing is not cheap because this is Honolulu, not Dayton (Ohio),” said Brewbaker at the conference.

The median home sale price in Dayton this year through October was $142,550, which includes single-family homes and condominiums. Honolulu’s comparable figure is $545,000. For Honolulu’s condominium market alone, the median sale price this year through October was $419,000.

Median home prices mark a point where half the sales are at a higher price and half are at a lower price.

Honolulu’s median sale price for single-family homes has continually peaked in each of the last five years, rising from $650,000 in 2013 to $755,000 last year. This year through October the median price reached $790,000.

But because local personal income has grown faster than median home prices in recent years with little movement in interest rates, even an $800,000 house is about as affordable as median-priced homes over the last five years.

Brewbaker calculated 34.7 percent of Honolulu’s $116,600 median household income for a family of four would be needed to afford an $800,000 house with an average conventional, 30-year fixed-rate mortgage. This percentage of income was about the same in 2014, 2015 and 2017. In other years going back to 2011 the percentage was around 33 percent.

“It doesn’t get much better than this,” he said.

The U.S. Department of Housing and Urban Development regards a housing cost up to 30 percent of income as affordable.

Brewbaker, who has data going back to 1976, said the recent stretch of relatively good home affordability in Honolulu has been better only twice before — from 1976 to 1978 and from 1998 to 2004.

Honolulu’s best affordability figure was 28 percent in 1999 when the median home price was $290,000 and the average interest rate was 7.4 percent. The worst affordability figure was 62 percent in 1981 when the average interest rate was 16 percent and the median house price was $154,576.

In 2007 at the peak of a housing bubble fueled by sub-prime mortgages, it took 48 percent of the median income to pay for a $643,500 median-priced home.

UHERO said in its report that when median home prices are adjusted for inflation, today’s median price is about 8 percent below the 2007 median price. The difference on the neighbor islands is even greater, at 25 percent to 30 percent below the adjusted median price, the report said.

How long this pretty good home affordability environment will last is hard to predict. UHERO forecasts that Honolulu’s median home price will rise 2.3 percent next year and 0.9 percent the year after that as personal income adjusted for inflation rises 1.6 percent and 1.3 percent, respectively.

Interest rates are viewed as more of a wild card but are expected to rise and worsen home affordability.