Housing Market Update: Signs of Life as Rates Drop

After a long stretch of higher borrowing costs, the housing market is finally showing some renewed energy. Average mortgage rates have fallen to their lowest level in over a year, and buyers are beginning to take notice. Refinance activity is picking up, and homebuyers who’ve been patiently waiting on the sidelines are starting to re-enter the market.

Mortgage Rates Hit a Yearly Low

According to recent data, average mortgage rates have dipped to 6.19%, down from over 7% earlier this year. That shift might not sound dramatic at first glance, but even a small reduction in rates can have a significant impact on affordability — especially in markets like Hawai‘i where every percentage point matters.

Lower rates mean lower monthly payments and, for many buyers, renewed buying power. It’s no surprise that we’re beginning to see movement as more people take advantage of this opportunity.

Home Sales Are Rising (Even If It Doesn’t Look Like It)

September’s existing home sales increased 1.5% from August and are up 4.1% from last year. That might sound modest, but there’s more to the story. The real, unadjusted numbers — meaning the actual homes sold — show an 8.2% increase year-over-year.

This tells us that buyer activity is stronger than the “headline” numbers suggest. As rates ease and more listings hit the market, many buyers are finding opportunities that simply weren’t available earlier in the year.

The Fed and Future Rate Cuts

The Federal Reserve is currently discussing one to two more rate cuts before the end of the year. While it’s still uncertain how mortgage rates will respond, this potential policy shift could further improve affordability and keep market momentum going through the holidays.

If inflation continues to cool, we may even see rates dip into the mid-5% range — something that could open doors for many more homebuyers across Hawai‘i.

What This Means for Hawai‘i

For our island communities, where housing inventory remains limited and affordability challenges are always top of mind, these small rate improvements can make a big difference.

More favorable borrowing conditions are likely to encourage both local buyers and those relocating from the mainland to make their move before rates rise again.

If you’ve been considering buying or refinancing, this could be a great moment to start the conversation and prepare for what’s next.

Final Thoughts

After a challenging few years, it’s encouraging to see early signs of recovery in the housing market. Lower rates, improving affordability, and steady sales growth are all steps in the right direction — and the outlook for the rest of the year looks brighter than it has in quite some time.

Whether you’re thinking about buying, selling, or just exploring your options, staying informed helps you make confident decisions.

About Nichole Ehrbar

Nichole Ehrbar is a Realtor® with ZT Real Estate, specializing in Hawai‘i’s diverse real estate market. Known for her deep local insight and commitment to helping families find their place in paradise, Nichole guides clients through every step of the buying and selling process with care, clarity, and Aloha.

Let’s connect: If you’re thinking about making a move or have questions about Hawai‘i’s market trends, Nichole is happy to help.