Could it Cost You Less to Buy a Home in Honolulu Than to Rent One?
More than 59 percent of Honolulu renters are spending more than 30 percent of their household income on rent.
Image: Courtesy of Abodo
We’ve all heard it: Don’t spend more a third of your income on housing. Abodo, a national rental-finding application, did a study on what the Department of Housing and Urban Development calls housing-cost burdened—households that spend more than the recommended 30 percent limit. With more than 59 percent of us spending more than 30 percent of our household income, Honolulu was ranked the second highest in the country, with only the Miami/Ft. Lauderdale area of South Florida beating us.
What’s different about Honolulu? Note the colors in the graph—purple is those with incomes greater than $75,000 a year. While most areas report that the greatest number of those burdened are living at or below poverty level, we’ve got more folks at the highest earning levels studied than other top cities spending more than 30 percent of their income on rent every month. Why? Because our rents are really, really high. So high, in fact, that, with interest rates as low as they are now, most renters could reduce their monthly housing costs by buying.
The median household income in Honolulu County per the U.S. Census in 2015 is $73,581. Thirty percent of that is $1,839.52/month to spend on rent. Right now, a search of rental properties with a minimum of two bedrooms (it is a household, after all) and within a 30-minute drive of Downtown shows 47 rentals available for under $1,850 a month. All are apartments, and most are located in Salt Lake, Mō‘ili‘ili and Makiki areas. Of them, only one was a three bedroom, and there were no larger than that.
Want to learn more? Click here for more information. Considering making the leap to home-ownership? Speak to your financial planner, reach out to a lender (click here to visit the Hawai‘i Association of Mortgage Brokers website), or contact a real estate agent to find out what you can buy.