Buying a first home in Hawaii has always been a challenge, but between 2018 and 2023, it became even tougher. Soaring prices, rising interest rates, and stubbornly low inventory forced new buyers to adapt in ways not seen a decade ago. Many turned to smaller condos, expanded their home searches beyond urban hubs, or leaned heavily on family support and creative financing. Despite the hurdles, first-time buyers across the islands are still finding ways to plant roots in one of the country’s most competitive—and breathtaking—housing markets.
Hawaii’s Housing Market Overview (2018–2023)
From 2018 to 2023, Hawaii’s home prices climbed dramatically, reaching all-time highs. Median home values in Hawaii are the highest in the nation, even above California’s. As of 2023, the average home price in Hawaii was around $828,000, about $70,000 higher than in California.
During the pandemic boom (2020–2022), prices accelerated sharply. Before the pandemic, the statewide median single-family home price was roughly $650,000. By 2022 it had jumped about 35% to well over $850,000. Condominiums saw prices jump about 30%, from a ~$453,000 median in 2019 up to ~$587,000 in 2022. By 2023, the median condo price hit roughly $600,000 and single-family medians stayed around the mid-$800,000s. In populous counties like Honolulu (Oʻahu) and Maui, the typical single-family home has hovered around $1 million or more in recent years.
Interest Rate Rollercoaster
This period was a rollercoaster partly because of mortgage interest rates. In 2018, a 30-year fixed mortgage rate averaged around 4.5%, and in 2019 around 3.9%. Then came an unprecedented drop: by late 2020–2021, rates fell below 3%, making home loans unusually cheap. These rock-bottom rates allowed more buyers to qualify for mortgages and afford higher prices.
However, by 2022 the trend reversed – interest rates surged. The average 30-year mortgage hit about 5.3% in 2022 and around 6.8% in 2023, dramatically raising monthly payments. For example, a household that could afford an $800,000 loan at 3% found they could borrow much less at a 6%+ rate. This affordability squeeze in 2022–2023 priced some would-be buyers out and cooled the frenzy, though prices themselves only leveled off slightly.
Housing Supply Challenges
Another key factor was housing supply. Hawaii has chronically low inventory of homes for sale, and many owners held onto their houses. During 2020–2021, a refinancing boom took place as owners locked in those 3% rates. Once locked in, people became hesitant to sell and give up their cheap mortgages. This “lock-in” effect meant fewer starter homes on the market, making it harder for first-time buyers to find options. New construction of affordable homes also lagged demand…