A couple of months back, I wrote a column about the state of the city of Napa’s housing market titled “Will mortgage rates save Napa’s housing market?”
Since writing, mortgage rates have continued their decline at the same time as housing prices have cooled. This change comes after several years of intense price pressure and limited supply, bringing Napa’s housing market some sense of a normal cycle.
The key question is whether these trends signal a temporary breather or are part of a broader housing market selloff.
The state of Napa’s housing market
Napa city home prices have continued to ease from a year ago. According to Redfin, the city of Napa’s median home sale price declined 6.4% year over year as of September 2025. Nearly 28% of single-family home listings have needed a price drop to attract buyers.
The explanation for this is found in the continuation of a buyer shortage and a seller surplus.
As of September, the U.S. housing market had roughly 1.96 million sellers and 1.43 million buyers (Redfin Data Center).
Redfin classifies a market with more than 10% additional sellers as a buyer’s market, and today’s gap sits well above that threshold. The number of sellers has decreased slightly since May 2025 but remains high following a two-year run of increasing supply.
At the same time, the number of buyers has continued its descent, maintaining the disparity between supply and demand. This slide in demand comes despite 30-year mortgage rates improving from 6.79% in November 2024 to 6.22% in November 2025.
Average rental prices have also softened locally. Zillow data shows Napa city’s average rent falling from $3,450 in late 2024 to $2,950 in 2025. This shift is driven less by falling rental prices and more by the mix of rental options offered and selected by renters.
For example, as ADUs and smaller apartments become a larger share of available rentals, the average price naturally declines. This is positive, as it shows the rental market has held strong with more affordable and smaller rental options coming to market.
In a Napa nutshell
Taken together, the decline in mortgage rates, easing home prices, and more affordable rental options point to improved affordability in the city of Napa.
This is encouraging, especially as the national economy appears relatively stable. According to Deloitte, consumer financial well-being rose from August to September, and McKinsey has reported improved consumer sentiment compared with a year ago.
If these consumer indicators hold, the current cooling may represent a constructive rather than concerning development.
A market defined by a significant disparity in supply and demand is not sustainable long term; however, this moderation seems welcome, as it may bring a more accessible chapter for new and existing residents without a significant economic slowdown.
Thank you for reading!
Remy Jacobson, CFP is an Investment Advisor Representative offering Securities and Advisory Services through United Planners Financial Services (UP), Member: FINRA, SIPC. JWM and UP are independent companies. Views are those of the individual author; for educational purposes only and not considered advice of any kind. No future guarantees. Learn more about Remy Jacobson at jacobsonwealth.com.
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