Hawaii Mortgage Market Update – June 2025

Each month, we bring you insights from one of the best in the business — Zack Diener of Barrett Financial Group, LLC — to help you stay informed and make confident, well-timed decisions in today’s ever-changing mortgage and real estate landscape.

What’s Happening with Rates Right Now

Mortgage rates have been fluctuating between 6.5% and 7% throughout 2025, with the current 30-year fixed rate averaging around 6.85%. This range has become the “new normal” for many buyers this year, with rates showing some recent volatility as markets react to economic data.

Here in Hawaii, local lenders are showing rates that mirror the national trends, with Hawaii rates averaging around 7.04% for 30-year fixed mortgages. The good news is that our local banks and Hawaii-based credit unions often remain competitive with mainland rates, and they understand the unique aspects of island real estate financing. As a local mortgage brokerage with longstanding partnerships with local and mainland institutions alike, we are able to find the best deals being offered at any given moment.

The Silver Lining

Here’s the encouraging news: mortgage industry experts are forecasting rates to gradually decline through the remainder of 2025, with predictions showing rates settling closer to 6.3% by year-end. While we’re not returning to the historic lows of 2020-2021 anytime soon, this downward trend could provide some relief for both buyers and those looking to refinance.

What This Means for Your Home Purchase

Bottom Line: If you’re waiting for rates to drop significantly before buying, you might be waiting a while. The difference between today’s rates and where they’re projected to be in 6-12 months is roughly 0.4-0.5%. On a $500,000 loan, that translates to about $125 per month – meaningful, but probably not enough to justify missing out on the right home.

The Strategy: Focus on finding the right property at the right price. Rates are a factor, but they’re just one piece of the puzzle. You can always refinance later if rates drop significantly, but you can’t go back and buy that perfect home that got away.

What’s Driving Rate Decisions

The recent inflation reports are telling an encouraging story. The Consumer Price Index came in at just 0.1% in May, better than the expected 0.2%, showing that inflation pressures continue to ease. This is exactly what the Federal Reserve wants to see before they feel confident about lowering rates.

However, the Fed is walking a careful line right now. New tariff policies have created uncertainty about future inflation, which is why the Fed has been more cautious about rate cuts than they initially planned last year. Economists estimate that proposed tariffs could add 0.5 to 0.8 percentage points to inflation, making the Fed hesitant to move too aggressively on rate reductions.

The Fed is essentially in “wait and see” mode – they want to ensure that inflation stays on track toward their 2% target before committing to rate cuts. The good news is that the recent data is moving in the right direction.

The mortgage market may not be offering the “deals” (in the form of 3% rates) of a few years ago, but for qualified buyers, financing is still readily available and the fundamentals of homeownership remain strong.

Mortgage insights provided by Zack Diener, Barrett Financial Group

Zack Diener
Mortgage Loan Originator | NMLS 470413
Based in Fort Collins, CO
Serving Hawaii and Colorado
(808) 349-3777 phone
(800) 385-3630 fax
[email protected]

Barrett Financial Group, LLC | Corp NMLS #181106
275 E Rivulon Blvd, Suite 200, Gilbert, AZ 85297