Looking to buy a house in Hawaii?
Whether you're thinking of moving to the state capital of Honolulu, the resort town of Lahaina, or scenic Hilo, Hawaii offers unique opportunities for homebuyers. The state's tropical climate, stunning beaches, and laid-back lifestyle make it particularly appealing to luxury buyers and those seeking an island paradise, despite its high cost of living.Our guide breaks down 8 steps to buying a house in Hawaii, with practical tips to help you navigate the Hawaii housing market.
🔎 Start the search: Get matched with top Hawaii buyer’s agents and get cash back on your purchase.
📊 Hawaii housing market overview
According to Zillow, the market heat index of top Hawaii cities averages at 36, which indicates the market is a buyer's market.[1]
- 💰 Median home value: $841,274 (projected to decrease by 2.08% in the next year)[1]
- 💵 Median sale price: $956,100 (23.37% higher than the median listing price.)[2]
- 📉 National average mortgage rate: 6.76% (up 1.80% compared to last month)[3]
- 🏠 Current housing inventory: 6,303 units (up 6% compared to last month)[4]
- ⏰ Days on market (DOM): 73 days (down 0% compared to last month)[4]
Step 1: Save for a down payment
Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender pays the remaining balance.
A down payment can be up to 20% of the home's final price. In Hawaii, that could mean paying up to $191,200 for a $841,300 home.
If you put less money down, your mortgage lender will typically require you to get private mortgage insurance (PMI) on the loan. That can save you money upfront but increase your monthly mortgage payment and total interest costs over the life of the loan.
However, if you can't afford to put that much down at closing, or want to hold onto more of your cash to cover other home-buying expenses, some government-backed loans have lower down payment mortgage options.
- Federal Housing Administration (FHA) loan: Offers 3.5% and 10% down payment options, depending if you meet the FHA mortgage loan requirements.[5]
- VA loan: Offers 0% down payment options with no private mortgage insurance required — only available to certified U.S. veterans and active-duty military service members.[6]
Compare down payment assistance programs in Hawaii
If you're having trouble affording a home, there are several down payment assistance (DPA) programs available to first-time and low-income buyers throughout the state of Hawaii. These programs provide eligible homebuyers with a grant or second mortgage to help cover closing costs or a down payment.
| Program | Max purchase price | Credit score |
| Chenoa Fund FHA Down Payment Assistance Forgivable | $766,550 | 600 |
| Chenoa Fund FHA Down Payment Assistance Repayable | $766,550 | 600 |
| Deferred Closing Costs Assistance Loan | Varies | Varies |
| Down Payment Assistance Loan (DPAL) Program | Varies | Varies |
This program has a 30-year term with an interest rate of 0% (0% APR). This loan does not require a monthly payment on the second mortgage. Forgiveness is determined by the DPA amount. Both the 3.5% and 5.0% forgivable loan options may be forgiven at the end of the 30-year term if the previous forgiveness conditions have not been met, even if the borrower made late payments on the FHA first mortgage.
- Program provider: CBC Mortgage Agency
- Down payment assistance: Varies
- Max purchase price: $766,550
- Max household income: Varies
- Credit score requirement: 600
- Available statewide: Yes
- ONLY available to first-time home buyers: No
This program offers a 10-year term with an interest rate matching the interest rate on the FHA first mortgage. This loan has the 3.5% or 5% DPA option and does require a monthly payment on the second mortgage.
- Program provider: CBC Mortgage Agency
- Down payment assistance: Varies
- Max purchase price: $766,550
- Max household income: Varies
- Credit score requirement: 600
- Available statewide: Yes
- ONLY available to first-time home buyers: No
The Deferred Closing Costs Assistance Loan is a Deferred loan, providing up to $15,000 on a 15-year term. First-Time Homebuyer Education classes & a coaching session must be completed through Hawaii HomeOwnership Center. Can be combined with other HHOC Mortgage products. See Program guidelines for further details.
- Program provider: HHOC Mortgage
- Down payment assistance: Up to $15,000 loan matched on a 6:1 basis.
- Max purchase price: Varies
- Max household income: Varies
- Credit score requirement: Varies
- Available statewide: No
- ONLY available to first-time home buyers: Yes
The Down Payment Assistance Loan (DPAL) Program is a Deferred loan, providing up to $125,000 on a 30-year term. Mortgage interest is set at 4.5% or matches the first mortgage rate (whichever is lower). Minimum of 3% down payment requirement is required by the borrower. First-Time Homebuyer Education classes & a coaching session must be completed through Hawaii HomeOwnership Center. See Program guidelines for further details.
- Program provider: HHOC Mortgage
- Down payment assistance: The maximum loan amount for DPAL is $125,000.
- Max purchase price: Varies
- Max household income: Varies
- Credit score requirement: Varies
- Available statewide: No
- ONLY available to first-time home buyers: Yes
Step 2: Find a great real estate agent in Hawaii
Whether you're actively house hunting or just starting to browse homes, it's never too early to find a top realtor in Hawaii to guide you in your search. An experienced agent can help you navigate a tricky local market, explore your financial options, and negotiate the best deal when buying a house.
In addition to finding and showing you properties, your real estate agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers (like title companies and inspectors) to help you buy your house in Hawaii — just remember you can always shop around!
When choosing the right realtor, consider their local knowledge and proximity to the areas you're interested in. You can start your search by looking up a brokerage or realty, but don't stop there. Take the time to research and interview multiple real estate agents, paying attention to their:
- Years of experience (the median is 8 years)
- Number of home buyers helped in the last year
- Expertise in your target neighborhood and price range
- Online reviews and complaints
- Licensing and certifications, such as an Accredited Buyer's Representative
- Membership in local real estate boards, such as the Honolulu Board of REALTORS®[7]
With changes in August 2024 from the lawsuit against the National Association of Realtors, buyers now need to negotiate the cost of hiring a realtor directly with their real estate agent. While it's still likely that the seller of the home you buy will offer a concession to cover your agent, it isn't a guarantee. We recommend interviewing multiple buyer’s agents to compare their rates and service and to find one you feel comfortable with.
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Step 3: Get pre-approved for a mortgage
Mortgage pre-approval is a lender's conditional offer to lend you a maximum amount of money to buy a home.
Most sellers in Hawaii will ask for a mortgage pre-approval letter before showing you their home. It demonstrates that you're financially qualified to make an offer and can give you an advantage over buyers who don't have one.
Pre-approval is a more in-depth analysis of your finances than pre-qualification and serves as a more formal commitment from a lender. It can be as simple as a 40-minute phone call with your lender or mortgage broker, a credit check, and sending them your proof of funds. Once you make an offer on a house in Hawaii, you'll start the initial mortgage application.
Pre-approval is a more in-depth analysis of your finances than pre-qualification and serves as a more formal commitment from a lender. It usually requires a hard credit check and supporting documentation, such as paycheck stubs and W-2s. A hard credit inquiry may reduce your credit score by up to 5 points — that’s a minimal effect.
✍️ Tip: If you get pre-approved with multiple lenders within a 45-day window, it will only count as one credit inquiry, minimizing the impact on your score
Pre-qualification gives you a basic idea of what you might be able to borrow based on a quick look at your finances.
What do mortgage lenders review?
To figure out if they can pre-approve you for a mortgage loan, mortgage companies usually check the following:
- Credit report
- Credit score
- Payment history
- Monthly income
- Debt-to-income ratio
- Employment
How do I choose a mortgage lender?
When choosing a mortgage lender, consider each lender's quoted interest rate, estimated closing costs and fees, reputation and online reviews, and customer service quality. Compare interest rates and pre-approval amounts from several lenders to make sure you're getting the best rate and terms when you buy your Hawaii home.
A local lender may have a better understanding of lending regulations in Hawaii, but you don't necessarily need to use a state-based lender. Many national and online lenders are licensed to provide mortgage loans in Hawaii and may provide better rates and terms.
Step 4: Choose the right location
Start zooming in on the best neighborhoods where home prices fall within your budget, and consider what you want out of your home. In Hawaii, this could mean exploring Oahu's diverse areas like Mililani or Ewa Beach, where you'll find different price points and newer developments with more space than urban Honolulu.
If home equity is most important to you, look at growing areas like Kakaako near downtown Honolulu, where new luxury developments are transforming the skyline, or Kapolei, where continued expansion is creating opportunities for appreciation.
Don't forget about local culture and amenities that fit your lifestyle. For example, Kailua offers a beach town atmosphere with excellent shopping and dining, while Kahului and Kihei combine convenience with more moderate prices than resort areas.
If you prefer a slower pace with natural beauty, consider Hawaii Island's Hilo side for lush tropical settings and more affordable prices, or explore Princeville on Kauai for dramatic mountain and ocean views. The Big Island's Puna district offers some of the state's most affordable properties, though it's important to research lava zones and insurance requirements.
Housing affordability in Hawaii
In our recent homeownership study, Hawaii ranked #45 in housing affordability.
The most affordable places to live in Hawaii are:
- 🥇 Honolulu: Median home value of $550,560
- 🥈 Hilo: Median home value of $513,531
- 🥉 Pahoa: Median home value of $289,462
Living and lifestyle in Hawaii
When you’re looking at different home prices and value appreciation, don’t forget to look at how the location will affect your quality of life.
In our recent study about the best places to live in the U.S., Hawaii ranked #4 in desirability. Honolulu ranked #1 as the most desirable mid-sized city metro in the United States.
Here are some of the things to consider when looking for the right home location in Hawaii:
- 🛍️ Amenities
- 🚗 Commute time
- 🚨 Crime rate
- 🌱 Future development
- 🌳 Green spaces
- 🏥 Healthcare access
- 🌊 Natural disaster risks
- 🏫 School quality
While a prime location often comes with a higher price tag, it may offer long-term benefits in terms of appreciation and daily satisfaction. Your real estate agent can help you balance your budget and personal preferences to find the right location for you.
Step 5: Start house hunting in Hawaii
Searching for homes in Hawaii is the fun part of the home-buying process! You'll get to look at a variety of available listings and discover what you really want in a home. But before you start house hunting, it helps to determine when the best time is to buy a house in Hawaii based on your priorities.
As you’re house hunting, consider the full costs of owning a home in Hawaii, not just the monthly mortgage payments. Other potential costs of owning the home include maintenance and repairs, property taxes, homeowner's insurance, and HOA fees.
Once you have a good idea of what you’re looking for, your agent will search for homes on your local Multiple Listing Service (MLS), bring you top picks, and schedule viewings and tours.
Step 6: Make an offer
Once you find a house in Hawaii that you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that will give you the best shot at convincing the homeowner to sell.
Part of your offer could include an earnest money deposit, which may be 1–2% of the purchase price. It's an incentive for the sellers to take the home off the market until closing. If the sale goes through, the earnest money goes toward your down payment, so you won't be anything additional out of pocket.
The speed of your offer often depends on how fast the Hawaii housing market is moving and how many houses are currently on the market.
When houses are on the market for a short amount of time, it typically indicates that demand is high and houses are selling fast. Last year in September, Hawaii houses stayed on the market for an average of 75 days — the least amount of days.[4]
When houses sit on the market for a while, demand may be lower, and you could have more time to make an offer. Last year in December, Hawaii houses stayed on the market for an average of 94 days.[4]
Step 7: Inspections, appraisals, and financing
Once the seller accepts your initial offer, you must do due diligence before officially purchasing the home. Buyers order home inspections to evaluate the home's condition fully, and lenders use appraisals to determine value and decide the final loan amount.
If something unexpected pops up or if the home's appraisal comes in below the purchase price, you could have an opportunity to renegotiate the terms of your contract.
Underwriting
In the underwriting period, your lender will verify that you can afford your mortgage. They may ask for proof of income, pay stubs, letters of explanation for income that doesn't come from wages, and other loan statements (like for student debt).
Delays could lead to a postponed closing, so start collecting this information early so that you’re ready to submit documents when your lender asks.
Home inspections in Hawaii
Having your house in Hawaii inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it. A licensed professional checks the house for any unseen, unexpected, or potential issues. If the home inspection reveals major issues about the home, you’ll likely have some room to negotiate with the seller.
A home inspection costs between $250 and $250, depending on factors like the home's location, condition, and age.[8]
Hawaii law requires sellers to inform buyers of all known issues with a property, but some problems can go undetected. To protect yourself from expensive repairs in the future, it's highly recommended to perform a few additional tests after the general home inspection to uncover all potential hazards.
- Radon testing: It's generally recommended to test homes regularly for elevated radon levels, so consider doing a test if the seller hasn't performed one within the past year. You can typically order a free or discounted radon test kit from the state government, or your inspector will perform a radon inspection.
- Pest inspection: Pest inspections aren't required, but having one done now can save you from serious infestations and structural damage later. Termites and other pests can invade a home and go undetected by residents until they cause extensive damage. Get a thorough check from a professional to put your mind at ease.
Home appraisals in Hawaii
Home appraisals determine the value of the property. If you're using a mortgage to buy your new house in Hawaii, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
The buyer typically pays the appraisal fee, which is between $250 and $364 in Hawaii.[9]
If a home appraisal comes back lower than expected, then you have several options to consider.
- You can attempt to renegotiate the purchase price with the seller, potentially using the appraisal as leverage.
- If possible, you can increase the down payment amount to make up the difference between the appraised value and the agreed-upon price.
- You can request a second appraisal if there are concerns about the accuracy of the first one.
- You can walk away from the deal if your purchase contract includes an appraisal contingency.
Ultimately, the best course of action depends on your financial situation, the local real estate market, and how much you want the property.
Step 8: Close on your new home!
Final walk-through
Before you close on your new home, you and your real estate agent will do a final walk-through of the property to ensure that it's still in the expected condition. You'll want to check to make sure:
- The appliances are in working order.
- Any agreed-upon repairs were handled by the seller.
- There was no damage to the home when the seller moved out.
Closing day
On the closing date, you’ll meet at the title company to review lots of important paperwork. You'll need to read and sign several documents, including:
- The final loan application
- The deed transfer
- Various disclosures
Before signing anything, ask your agent or closing attorney about any questions you have to make sure you fully understand each document.
Hawaii doesn't require you to hire a real estate attorney to buy a home. However, depending on your circumstances, you might consider hiring one anyway. If you do, treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.
Hawaii buyer closing costs
After completing the paperwork, you'll have to pay for closing costs. The title company will collect the total amount you owe for various services and pay each party on your behalf.
Typically, a buyer's closing costs can be separated into five categories:
- Buyer agent fees: According to the NAR lawsuit settlement of August 2024, buyers are now responsible for negotiating buyer's agent commission rates with their agent. If the seller hasn't agreed to pay the buyer's agent fee as a concession, you'll likely be on the hook for covering the fee. In Hawaii, the average buyer’s agent commission fee is 2.47%.
- Prepaid costs: Ongoing costs of homeownership, such as property taxes and homeowners insurance. Mortgage lenders often require buyers to pay these monthly fees upfront.
- Title and escrow charges: Charges for the title company's services, such as title searches and title insurance.
- Lender fees: Fees for the mortgage company to originate and underwrite your loan. Lender fees might include other expenses associated with your loan, such as appraisal fees or mortgage points.
- Other closing costs: Miscellaneous costs unique to each buyer. Other closing costs can include pest inspection fees, natural disaster certification fees, and other variable expenses.
Buyers in Hawaii typically pay 3%-5% of the purchase price in buyer closing costs. For a $956,100 home — the median sale price in Hawaii — that's between $28,683 and $47,805.
After signing all of the paperwork, you'll get the keys and can move into your new house in Hawaii. Congrats!
If you took out a mortgage to purchase the home, your first monthly payment is likely due within a month after closing. Ask your lender for more specific details about the monthly payment schedule, how to make the first payment, and how to set up automatic payments (if desired).
Clever matches you with top local buyer's agents so you can easily compare options and choose the best fit. Plus, we give you cash back on eligible purchases to help cover moving costs.
Our service is 100% free to use with no obligation. Give us a try today!
Frequently asked questions about buying a house in Hawaii
Whether you should buy depends largely on your personal situation. Hawaii's tropical climate, unique culture, and natural beauty make it a dream destination for many buyers. However, high home prices, elevated cost of living, and additional maintenance concerns due to humidity and salt air require substantial financial resources to enter the market.
According to Zillow, the Hawaii housing market is currently a buyer's market. This indicates that the housing supply exceeds the demand, which gives buyers the advantage. With the help of a local real estate agent, you have a good chance of getting a great deal on a house in Hawaii.
According to our recent homeownership study, a buyer needs an average salary of $176,323 to afford a median value home in Hawaii.
Yes! It’s called the HHOC Mortgage Booster program.
As interest rates remain much higher than a couple of years ago, this pilot program is meant to provide a “boost” to the amount a borrower can qualify for. It requires a minimum of 3% down payment, but also has a fixed interest rate of 3%. The maximum loan amount of $50,000, and it's amortized over 30 years.
20% is the recommended down payment amount in Hawaii. For a median value home in the state, that would be around $191,200. You can pay less than 20%, but you'll typically have to pay private mortgage insurance (PMI) on the loan.
The Federal Housing Administration (FHA) offers loans with lower down payment options — 3.5% and 10%, depending on your credit score and other FHA requirements.
From accepted offer to closing day, buying a house in Hawaii typically takes around 35 days. Cash offers can close even faster since they skip the mortgage process entirely.
To keep things moving quickly, have your financial documents ready, respond promptly to your lender's requests, and choose an experienced team (realtor, lender, and inspector).
Why trust us?
Data sources
To create this Hawaii home-buying guide, our team gathered historical housing data from Realtor.com, Redfin, and Zillow, mortgage rate data from Freddie Mac, and home loan information from multiple government websites. As our primary sources update, we refresh the data in our series accordingly. As always, we recommend consulting with a real estate agent to learn more about local housing data and developments within your market.
About Clever Real Estate
Clever strives to provide our readers with the most up-to-date, accurate, and useful information. We’ve earned buyers’ trust with a 5-out-of-5-star rating on Trustpilot and over 3,000 customer reviews.
Our team of industry-leading researchers is committed to making homeownership more accessible by educating buyers through guides like this one. We've spent thousands of hours analyzing publicly available data, surveying consumers, and interviewing industry experts. Our research has been featured in The New York Times, Business Insider, Inman, HousingWire, and many more.
