HONOLULU (KHON2) — Mortgage debt is piling up across the country, and Hawai‘i is near the top of the list. While some states saw their average mortgage balances shrink at the end of 2024, Hawai‘i moved in the opposite direction and began climbing to the second-highest average mortgage debt in the United States.
The average monthly payment here is also one of the highest. For local homeowners, that’s a serious problem.
A new report recently released is ranking all 50 states on how much mortgage debt they added from the third to the fourth quarter of 2024. Hawai‘i ranked fifth overall, even though the increase in debt was small. That’s because the debt here was already so high, and it continues to grow.
Whether you already own a home, are trying to buy one, or are just watching prices rise, here are the most important things to understand about Hawai‘i’s mortgage situation right now.
1. Mortgage debt in Hawai‘i is some of the highest in the country
Hawai‘i ranked No. 2 in the country for average mortgage balance, at $369,215 in Q4 2024. The average monthly payment was also sky-high: $2,538. That means many homeowners here are paying more for housing each month than residents in nearly every other state.
The increase from Q3 to Q4 2024 was only 0.28%; but because prices are already so high, even small increases can mean big changes in total cost over time.
2. This is about more than numbers; it’s about stress and survival
High mortgage payments can take a toll on a family’s budget. In Hawai‘i, where the cost of living is already steep, a mortgage payment above $2,500 each month can push many people to the edge. Homeowners may feel forced to skip savings, take on more jobs or fall behind on other bills.
When a large portion of your income goes to housing, it limits what you can do in other areas, whether that’s taking care of your health, planning for retirement or supporting your children.
3. Rising debt makes it harder for first-time buyers to compete
People trying to buy a home for the first time face a tough market. Prices are high, interest rates are high and demand often outpaces supply. With mortgage debt increasing, competition becomes even tougher.
First-time buyers may have to settle for smaller homes, longer commutes, or riskier loans just to get into the market. In a place like Hawai‘i, where land is limited and housing is already expensive, this challenge is even more extreme.
4. Refinancing might not be a good option right now
In past years, homeowners could refinance to a lower interest rate and reduce their monthly payment. But in 2024 and early 2025, interest rates remain high. That means refinancing is often not worth it; and for some, it could even increase their payments.
This puts people in a bind. If you’re struggling to keep up with your mortgage, but can’t refinance for relief, options are limited.
5. Small increases in debt can mean thousands more in interest
Even though Hawai‘i’s increase in mortgage debt from Q3 to Q4 was under 1%, the impact adds up. With large balances and long repayment periods, small increases in the amount borrowed can lead to thousands of dollars in extra interest over the life of the loan.
This is one reason the WalletHub report included Hawai‘i among the top five states to watch for rising mortgage risk. When already-high debt grows further, financial strain becomes harder to manage.
6. More debt could mean more defaults
When people can’t keep up with their mortgage payments, they risk foreclosure. That means losing their homes and hurting their credit. Rising debt, combined with high monthly payments, increases the chances of homeowners falling behind.
If defaults rise across the state, it can affect the housing market, increase the unsheltered population and put pressure on government services.
7. There are steps homeowners can take to manage their mortgage
If you’re a homeowner in Hawai‘i and worried about your mortgage, there are strategies that might help:
- Make extra payments, when possible, to pay down the loan faster and reduce interest.
- Switch to biweekly payments instead of monthly to sneak in an extra full payment each year.
- Use windfalls, like tax refunds or bonuses, to make lump-sum payments on the loan.
- Cut other expenses and redirect that money toward your mortgage.
- Talk to your lender early if you think you may fall behind; they may be able to help.
8. The cost of housing touches everyone in the islands
Even if you don’t own a home, mortgage debt affects you. When housing costs rise, rents usually follow. When families spend more on housing, they spend less elsewhere. And when people are forced out of homes they can’t afford, the whole community feels it.
This isn’t just a homeowner issue; it’s a Hawai‘i issue.
9. The mortgage market needs long-term solutions
To bring housing costs under control, local and state leaders will need to support policies that increase housing supply, protect homeowners and help first-time buyers. Affordable housing projects and lending reforms are all part of the solution.
Without action, rising mortgage debt could become the next major financial crisis facing Hawai‘i residents.
10. What you can do now
If you’re already a homeowner, stay on top of your budget and look for small ways to chip away at your loan. If you’re planning to buy, make sure you understand the full cost, not just the price tag, but the long-term payments.
It’s also important to talk to financial advisors, housing counselors or nonprofit services that can help you understand your options.
You can click here to read the full report.
Even in a tough market, informed choices can make a big difference.