To get straight to the point, I believe Honolulu is still a market that leans towards renting.

The median rent is $2,800 per month, while the median home price reaches $620,000, and the numbers reflect that.

If you calculate the Price-to-Rent Ratio directly, dividing $620,000 by the annual rent of $33,600 gives you 18.5.

This is close to neutral in the 15-20 range but leans slightly towards renting, as it approaches 21. From my perspective after observing the Hawaii market for over 30 years, this island has always repeated this structure due to land supply constraints.

The monthly payment calculation provides a clearer answer. If you make a 20% down payment of $124,000 and borrow the remaining $496,000 at a fixed rate of 6.75% for 30 years, the principal and interest alone would be $3,217.

Adding property taxes and insurance, the total PITI is estimated to be around $3,543. This means you would need to pay $743 more each month compared to renting at $2,800.

The opportunity cost of investing the $124,000 tied up in the down payment is also significant. Assuming a 7% return, that would be $8,680 annually, or $723 monthly. Combining these two burdens, the actual cost of buying exceeds renting by more than $1,400 per month. This is certainly a heavy burden.

However, Hawaii is an exceptional area. The property tax rate is significantly lower than on the mainland, with an effective rate of about 0.3%. This factor helps alleviate the buying burden compared to other high-cost markets. Compared to nearby Maui and Kauai, Honolulu is relatively more accessible.

For short-term residents or immigrant families settling in Hawaii for the first time, I recommend renting. On the other hand, if you are investing for rental income in a condo or if you have deep roots in Hawaii and plan to pass on your assets, the situation is different. I have seen many cases where long-term ownership offsets the burden of renting due to land scarcity and appreciation.

For Korean families, Hawaii is a unique market. In conclusion, if you plan to stay for less than five years, renting is the way to go, while if you are certain about settling for over ten years, the current high repayment burden could be a manageable choice in the long run.