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Odds Stacked Against Millennials for Home Ownership in Hawai‘i

June 22, 2019, 2:00 PM HST
* Updated July 2, 12:43 PM
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In the last month, monthly mortgage payments increased twice as fast as incomes. Median home prices rose 6% nationwide from 2018 to 2019.

It will take the average millennial on the median income a total of 14 years to save for a 20% down payment on a median-priced home meaning the younger generation is unlikely to afford a home till their 40s, according to the 2019 Home Affordability Report by Unison.

Student debt is the primary reason (83%) cited for holding off on buying a home.

As of 2019, millennials, who are now the largest generation, surpassing the baby boomers, are unlikely to become homeowners in Hawai‘i any time soon, according to the report.

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Hawai‘i’s housing affordability and homeownership rates among millennials are abnormally low, scoring a zero nationwide.

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In Honolulu, it would require the average millennial 40 years to save for a 20% down payment. From 2013 to 2018, monthly payments for urban Honolulu homeowners increased from $2,235 to $3,514.

The median household income in urban Honolulu is $71,236. The required income to meet that payment is $140,555, making it one of the least affordable cities in the nation.

In 2018, a down payment for the average home in Honolulu was $143.513.

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The median home price in Honolulu is $717,564. Home values increased by 48% in Honolulu from 2013 to 2018.

For these reasons, an increasing number of prospective homebuyers are looking into home co-investments, in which an investor assists in the downpayment in exchange for a share in the change of home value when the home sells.

Meanwhile, in Singapore, 90% of residents own their homes because supply is in balance with demand. In order for a housing model like this to be successful in Hawai‘i, the stigma around public housing needs to be eliminated.

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