Key facts
- Zillow said two-thirds of buyer connections went to a Preferred agent partner in the third quarter, roughly double a year earlier.
- Zillow said Preferred connections generate 35% more revenue per connection than its previous lead generation model.
- Zillow's for-sale revenue was flat year over year at $489 million; residential segment revenue fell 4% to $419 million.
- Zillow attributed the residential decline to higher-than-expected mortgage rates weighing on housing transaction volume.
- Mortgage segment revenue rose 32% to $70 million on a 55% increase in purchase loan origination volume to $2.0 billion.
- Rentals revenue rose 26% to $220 million, about 30% of total revenue, up from 21% two years earlier.
Zillow reported a net loss of $158 million for the third quarter of 2026, compared with net income of $10 million in the same quarter of 2025, the company said in a shareholder letter published on Wednesday. Revenue rose 7% year over year to $724 million.
The company said average monthly unique users across its apps and sites fell 3% in the quarter to 215 million, while overall visits fell 5% year over year to 2.3 billion, according to Comscore data. Zillow said it still drew 77% of average monthly unique visitors in the real estate category in the quarter.
Zillow said two-thirds of buyer connections in the quarter went to a Preferred agent partner in its integrated experience, roughly double the level a year earlier. It said it was on track for Preferred to represent more than three-quarters of connections by the end of 2026 and expected to reach 100% of connections in the first half of 2027. Preferred connections generate 35% more revenue per connection than its previous lead generation model, Zillow said.
For-sale revenue was flat year over year at $489 million, and residential segment revenue fell 4% to $419 million, which Zillow attributed to higher-than-expected mortgage rates weighing on housing transaction volume. Mortgage revenue rose 32% to $70 million on a 55% increase in purchase loan origination volume to $2.0 billion. Rentals revenue rose 26% to $220 million, with multifamily revenue up 35%; Zillow said rentals now account for roughly 30% of total revenue, up from 21% two years earlier.
Zillow said its AI search mode is available to 100% of signed-in users and that visitors who use it spend nearly three times as long on the site as those who do not. The company said its engineers are using AI to ship 60% more changes to production than in 2024. It also said its Follow Up Boss CRM had roughly 141,000 monthly active users, up 16% year over year, and that more than 800 brokerages had signed up for its Zillow Preview pre-marketing product.
In the letter, Waksman and Hofmann wrote that Zillow sees "a clear path to more than $1 billion in annual rentals revenue" and that the company kept growing even as housing conditions deteriorated.