Maybe you’re thinking of buying your first home in Hawaii, or perhaps you’re relocating to Hawaii from another state. Either way, it’s important that you educate yourself on Hawaii before shopping for a home and mortgage. Here are some things you will need to know before buying a home in Hawaii:

The first item to consider is that Hawaii homes for sale are much more expensive than the national average. The median price of a home in Hawaii (PDF) is $624,000. It appears to have peaked in the $650,000 range, with Maui peaking (and plummeting) even higher (and fluctuating more). Homes in Hawaii doubled in price over the last 5 years. In hindsight, everyone sees that they appreciated at rates so high that they were unsustainable at those rates. As a result, income levels in many parts of Hawaii are too low to purchase a median-priced home with a conventional loan. This ratio, of the median sales price to median household income is known as the housing affordability index. In fact, it’s a tradition for homeowners in most Hawaii cities to purchase homes large enough to house several generations of their family members.

The good news is that average interest rates in Hawaii in line with the national average, due to stricter lending standards and a relatively stable economy. Freddie Mac increased “super conforming” limits to over $700,000. Conventional loan amounts in Hawaii are higher than anywhere else in the nation.

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