Hawaii's economy grows as residents seek affordability elsewhere
Economic drivers
Hawaii's economic growth is primarily driven by visitor spending and expansion in non-tourism sectors like non-durable goods manufacturing, information, and finance and insurance. Construction, fueled by state and federal infrastructure projects, including defense spending, also contributes to the economy.
Housing market right now
The Honolulu housing market in February 2026 saw single-family home sales increase by 6% year-over-year, with a median price of $1,205,000. Conversely, condominium inventory grew by 5.4%, especially for units priced below $399,999, leading to longer market times for condos.
Migration patterns
Hawaii continues to experience a net out-migration of residents, with 2,123 more people leaving than moving in during fiscal year 2025. This trend is largely attributed to young local families relocating to the mainland due to the high cost of living. Those moving to Hawaii tend to skew towards retirees.
Headwinds
Federal policy uncertainty, including government shutdowns and potential cuts to federal funding, poses a risk to Hawaii's economy, particularly given the state's reliance on federal spending. The tourism sector also faces headwinds with fluctuating visitor arrivals and spending.
Key facts
- Hawaii's real GDP is projected to grow by 1.7% in 2026. (DBEDT, March 2026)
- The state's population decreased by 2,132 people (0.15%) in fiscal year 2025. (U.S. Census Bureau, January 2026)
- The median sale price for single-family homes in Honolulu was $1,205,000 in February 2026, a 1.7% increase from February 2025. (Honolulu Board of REALTORS®, March 2026)
- Hawaii's minimum wage increased to $16 per hour on January 1, 2026. (STL.News, January 2026)
- The New Aloha Stadium Entertainment District (NASED) project is expected to generate over $2 billion in construction spending. (Building Industry Hawai'i, September 2025)