There is no doubt that the interest rate has been rising a bit this year, however from the graph above you can see the interest rate in USA is still at its all time low. So if you are looking to purchase a home in Hawaii, it is not a bad time either. Hawaii real estate prices are still climbing.
March 2018, the possibility of rising interest is 95% so the experts said and yes it did happen.
It is possible that in 2018 the interest rate might increase 3 times and after the March increase, we are expecting 2 more times.
For those of you who are waiting on the fence hoping the rising interest rate would cause the market to lower the price of home, the result may not be too pleasing for you. The reasons are as followed.
Prices of homes are driven by demand and supply. In the past we have seen the price of home increases disregard the rising of interest rate. This is evidenced by the last 6 time mortgage interest rates increased more than 1%.
The demand for homes will not decrease because people tend to want to own their own homes. So even if the interest rate rises, the demand will not be affected dramatically. Supply of homes is always in deficit for Hawaii and almost 45-50% of the residence is Hawaii are renters, the supply being limited will definitely keep the home price afloat. Unlike many places on the mainland USA, the land is very limited in Hawaii or at least on Oahu. For this reason, it might not be wise to wait on the sideline hoping the price of home will drop dramatically just because interest rate is going up slowly but surely.
Your Reliable Agent
I-Hsiang Tsai MD, RA