This Week in Napa Valley Real Estate: Mortgage Rates Hit 6% — What Buyers and Sellers Should Know

Mortgage rates dipped to roughly 6% this week, their lowest level since 2022. On paper, that reduces monthly payments by about 10% year over year, which is meaningful in a higher-priced market like Napa Valley.

Still, lower rates alone don’t move markets. The real question is whether buyers respond—and how sellers adapt. This market is creating different opportunities and responsibilities for both sides, and understanding where leverage sits today is key to making smart decisions.

Here’s what I’m watching and how it applies specifically to Napa Valley.

Are Lower Rates Bringing Napa Buyers Back?

In past market cycles, the fastest signal of renewed demand hasn’t been headlines—it’s been price reductions.

Nationally, about 35% of active listings have reduced their price, slightly higher than this time last year. Locally, the signal is even more pronounced: approximately 47% of active Napa Valley listings have already undergone at least one price reduction, based on current MLS data.

When mortgage rates briefly touched 6% in early 2023, price cuts declined quickly as buyers re-entered the market. In contrast, during 2025—when rates remained higher—price reductions stayed elevated. What we’re seeing now suggests that while financing conditions have improved, buyers remain disciplined and unwilling to stretch for aspirational pricing.

For sellers, this reinforces an important reality: buyers are responding to value, not optimism—even with better rates. For buyers, it signals that patience and selectivity continue to be rewarded.

Inventory in Napa Valley Remains Tight

Limited supply continues to shape the Napa Valley housing market.

Across the U.S., new listings are running about 10% below last year, and inventory recently dipped further due to the holiday lull. While unsold inventory nationally is only modestly higher than a year ago, Napa’s constraints remain more structural than cyclical.

Locally, annual home sales volume has settled between approximately 530 and 590 units, well below the 966 sales recorded during the 2021 peak. Zoning limitations, scarce land, and fewer discretionary sellers continue to keep inventory tight—particularly for in-town homes, vineyard properties, and turnkey second residences.

This scarcity continues to act as a floor under pricing, even as the market recalibrates.

Buyer Activity: Improving, But Selective

National home sales are only about 1.4% higher than last year, pointing to modest improvement rather than a surge. Softer job growth has kept some buyers cautious, even those who are financially capable.

In Napa Valley, buyer behavior reflects that caution:

• Buyers are monitoring rates closely

• Waiting for the right property rather than rushing

• Weighing lifestyle, location, and long-term value more heavily than short-term timing

The most volatility is currently occurring in the $1M–$2M price range, where buyers tend to be most sensitive to monthly payments. Entry-level and luxury segments remain more stable, though still highly selective.

What’s Happening With Napa Valley Home Prices?

Prices continue to hold within a relatively narrow range.

Since 2020, the Napa Valley median home price has increased from approximately $765,000 to $940,000, representing a cumulative appreciation of nearly 23%, or a compound annual growth rate of about 4.2%. While the market experienced a modest correction between 2024 and 2025, pricing has stabilized well above pre-pandemic levels.

One of the most telling current metrics is the sale-to-original-list-price ratio. In 2025, Napa sellers received an average of 96% of their original asking price—a clear shift from the 100%+ ratios seen in 2021 and 2022.

For buyers, this creates negotiating opportunities, particularly on homes that have been on the market longer than the current median of roughly 47 days. For sellers, it underscores the importance of a data-driven initial pricing strategy. Homes that launch with realistic pricing continue to perform best, while those priced aggressively are more likely to require multiple adjustments and longer market times.

Bottom Line for Napa Valley Buyers and Sellers

Lower mortgage rates are a welcome step forward, but they don’t eliminate the need for thoughtful strategy.

For buyers, today’s market offers less urgency than peak years and more room to negotiate—especially on homes that have lingered or required pricing adjustments.

For sellers, demand is still present, but it is selective. Pricing, preparation, and positioning matter more than they did during the ultra-competitive years. Buyers are informed, patient, and value-driven.

In Napa Valley, every market cycle looks a little different. Property type, location, and timing continue to matter more here than national headlines suggest. Whether you’re considering buying, selling, or simply watching the market, understanding these dynamics is key to making confident decisions.

If you’d like to talk through how these trends apply to your specific property or goals, I’m always happy to have that conversation.

Related Research

Compass recently released its 2026 Housing Market Forecast, outlining where home prices, sales, inventory, and affordability may be headed next year.