2019 Hawaii Housing Planning Study

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financial preparedness among mover households percent interest rate, and a 20 percent down since the HHPS was begun in 1992. payment. Results are shown in Tables 19 and 20. Table 18. Qualified Demand for All Unit Types by Statewide, 41 percent of prospective single-family County, 1992, 1997, 2003, 2006, 2011, 2016, 201938 home buyers said they could afford to make the County monthly mortgage payments, but not necessarily the 20 percent down payment. Twenty-seven Honolulu Maui Hawaii Kauai State percent (27%) said they had the funds to make a 1992 51.7% 38.8% 40.2% 38.5% 48.4% 20 percent down payment but could not afford the 1997 47.3% 41.4% 34.3% 34.2% 44.4% monthly payment. About 20 percent of 2003 38.9% 35.7% 33.8% 31.4% 37.5% households statewide were qualified to meet both requirements. 2006 33.2% 39.6% 36.3% 30.6% 34.2% 2011 31.3% 31.3% 26.0% 27.3% 30.3% The same set of financial qualification measures 2016 44.0% 39.7% 36.9% 35.1% 42.1% was applied to potential homebuyers who sought 2019 27.5% 40.2% 25.4% 39.7% 29.2% to purchase a multi-family unit rather than a single-family home. We used the current median Source: Housing Demand Survey, 1992, 1997, 2003, 2006, sales price for condominiums in each county 2011, 2016, and 2019 rather than the single-family median. As shown in Table 20, residents planning to purchase a multi- 4. Purchase Preferences family rather than a single-family unit were more likely to be financially able to do so. Buyer and renter preferences and qualifications for housing unit types were measured in the The median price, monthly mortgage, and down Demand Survey. The objective was to provide payment required are lower for multi-family units. information on consumer preferences to support Therefore, more Hawaii households were able to housing issue analyses over the next few years. meet the requirements to purchase a townhouse or condominium unit. Study results confirmed that Forty-nine percent (49%) of those who planned to 29 percent of Hawaii households in the market for move said they wanted to buy their next unit. a multi-family ownership unit in the next five years Plans for homeownership were on the upswing, could afford to make the monthly payments. following an all-time low of 42 percent in 2011 and Twenty percent (20%) reported having enough to 47 percent in 2016. But plans to buy do not always make the down payment. Just under 16 percent translate into marketplace reality. About 17 of multi-family buyer households were fully percent of those who planned to purchase their qualified to purchase their next home next home conceded that they were not sure they would be able to afford it and may have to This analysis does not include the impact of continue renting. maintenance fees attached to many multi-family units. Across the State, maintenance and other a. Buyer Qualifications fees are often calculated at $0.60 to $1.50 per square foot. While the national average for To evaluate the financial readiness of households maintenance fees is$331, the average for Hawaii wishing to buy a housing unit in Hawaii in the next has been quoted as $539. If the $539 for five years, we examined their income, affordable maintenance fees was added to the monthly monthly housing payment, and total amount mortgage payment of $1,827 (Table 20), this available for a down payment. These elements would almost certainly reduce the number of were evaluated against a median-priced home households who would qualify for purchase. assuming a fixed-rate, 30-year loan, a four 38 For comparability with prior years, a 20% down payment homebuyers in 2018 was used for all other financial was used in determining financial qualification for this qualification tables. table. The average down payment of 11% made by Hawai'i Housing Planning Study,2019 Page 21 ©SMS December,2019