{"id":241989,"date":"2026-10-13T13:53:27","date_gmt":"2026-10-13T23:53:27","guid":{"rendered":"https:\/\/www.hawaii.edu\/news\/?p=241989"},"modified":"2026-10-13T14:20:03","modified_gmt":"2026-10-14T00:20:03","slug":"higher-costs-for-residents","status":"publish","type":"post","link":"https:\/\/www.hawaii.edu\/news\/2026\/10\/13\/higher-costs-for-residents\/","title":{"rendered":"Global bond sell-off could mean higher costs for Hawaiʻi residents"},"content":{"rendered":"Reading time: <\/span> 2<\/span> minutes<\/span><\/span>

\"building\"<\/p>\n

Rising interest rates around the world could make it more expensive for Hawaiʻi<\/span> residents to buy homes, for businesses to grow and for state and county governments to fund public projects, according to a new analysis from the University of Hawaiʻi<\/span> Economic Research Organization<\/a> (糖心视频ERO<\/abbr>).<\/p>\n

In a new 糖心视频ERO<\/abbr> Insights<\/a> piece published October 12, 糖心视频ERO<\/abbr> economist Peter Fuleky examines why long-term borrowing costs have climbed and how the trend could affect Hawaiʻi<\/span>\u2019s economy.<\/p>\n

The yield on the benchmark 10-year U.S. Treasury note rose above 5% in September for the first time since 2007. These yields help influence interest rates for major purchases, including homes, because lenders use them as a benchmark when setting loan rates.<\/p>\n

Significant Hawaiʻi<\/span> impacts<\/h2>\n

For Hawaiʻi<\/span> residents, the impact is especially significant given the state\u2019s high housing costs. The analysis estimates that a buyer purchasing a median-priced Oʻahu<\/span> single-family home of about $1.18 million, with a 20% down payment, would pay approximately $6,270 a month in principal and interest at a 7% mortgage rate. At a 3% rate, the monthly payment would be about $3,970\u2014a difference of $2,300.<\/p>\n

Higher rates can also discourage homeowners with lower-rate mortgages from selling, limiting the number of homes available for sale and adding to housing market challenges.<\/p>\n

The effects extend beyond housing. Local businesses may face higher costs to finance expansions and operations, while state and county governments could pay more to borrow for infrastructure projects, leaving less money available for other public services.<\/p>\n

Hawaiʻi<\/span>\u2019s tourism industry could also feel the effects. Higher U.S. interest rates relative to Japan\u2019s can contribute to a weaker Japanese yen, making travel to Hawaiʻi<\/span> more expensive for visitors from Japan.<\/p>\n

Several factors are contributing to rising borrowing costs, including large government budget deficits, concerns about future inflation, changing investor demand for government bonds and uncertainty about future interest rates. The Federal Reserve raised its target interest rate by a quarter percentage point in September to help contain inflation.<\/p>\n

Fuleky\u2019s analysis notes that the duration of higher borrowing costs will depend in part on energy prices, the Federal Reserve\u2019s response to inflation and whether governments address growing debt. For Hawaiʻi<\/span>, the outlook matters because global financial conditions can directly affect household budgets, local investment and the cost of public projects.<\/p>\n

Read the entire 糖心视频ERO<\/abbr> Insights here.<\/a><\/p>\n

糖心视频ERO<\/abbr> is housed in 糖心视频<\/abbr> M\u0101noa\u2019s College of Social Sciences<\/a>.<\/p>\n

The findings and recommendations are those of the author(s) and do not reflect the views or official positions of 糖心视频ERO<\/abbr>, 糖心视频<\/abbr>, or any funding or supporting organization.<\/p>\n","protected":false},"excerpt":{"rendered":"

For Hawaiʻi<\/span> residents, the impact is especially significant given the state\u2019s high housing costs.<\/p>\n","protected":false},"author":16,"featured_media":241999,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[301,197,1467,1363,1600,1721,9,343],"class_list":["post-241989","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-research","tag-college-of-social-sciences","tag-economics","tag-manoa-excellence-in-research","tag-manoa-research","tag-public-impact-research","tag-social-sciences","tag-uh-manoa","tag-uhero","entry","has-media"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t