Hawaii Life Real Estate Brokers released a mortgage market update on May 18, reporting that current mortgage rates in Hawaii have climbed to between 6.37 and 6.46 percent, reversing the brief drop below six percent seen in late April.
The update highlights the impact of recent economic developments on homebuyers and borrowers in Hawaii. According to Zack Diener of Barrett Financial Group LLC, “Today’s rates are sitting around 6.37-6.46% depending on which survey you check – a solid 40+ basis points higher than those glorious late-April lows.” He said this change translates to about $125 more per month for a $500,000 loan.
Diener attributes the rate increase primarily to an unfavorable inflation report for April, which showed consumer prices rising by 3.8 percent year-over-year—the highest since May of the previous year—and gas prices up nearly thirty percent annually due to ongoing conflict in Iran. He said, “For consumers, that means the cost of living remains uncomfortable.” Diener also noted that real average hourly wages fell by half a percent during April.
The report explains that as inflation rose unexpectedly, bond yields increased and mortgage rates followed suit. The ten-year Treasury yield jumped from just over four point two percent at the end of April to four point forty-four percent after the data was released. Markets have responded by lowering expectations for Federal Reserve interest rate cuts this year and even pricing in some chance of further hikes.
Diener said that while current rates may be disappointing compared with last month’s lows, they remain well below levels seen earlier in the year or during late 2023 when rates peaked at eight percent: “Anyone above 6.75-7% should still explore refinancing.” Most forecasts suggest mortgage rates will stay between six point three and six point five percent through summer unless there is significant change; Fannie Mae projects slightly lower averages near six point one percent.
Hawaii Life Real Estate Brokers operates as a locally owned company with more than three hundred thirty agents across twenty offices statewide and emphasizes cultural values such as integrity and personalized service inspired by aloha spirit, according to the official website.
Looking ahead, Diener advises buyers not to wait for perfect conditions: “If you’re waiting for rates to drop back to 5.5% or 5%, you’re betting on a peace deal in Iran AND the Fed cutting rates multiple times AND inflation coming down fast.” He concludes that now remains a reasonable time for qualified buyers ready to move forward.
