Zillow Q3 2026: Rentals Revenue Hits $220M as Residential Slips to $419M

Zillow Group grew third-quarter revenue 7% to $724m because rentals and mortgages grew fast enough to cover a 4% fall in Residential, the agent-funded business that has long been its core. Rentals revenue rose 26% to $220m and now makes up 30% of the group's revenue. Highlights of Zillow's Q3 report include:

• Revenue of $724m, up 7%, against 1% growth in the residential real estate industry by Zillow's NAR-based measure
• For Sale revenue flat at $489m
• Residential revenue of $419m, down 4%
• Mortgages revenue of $70m, up 32%, with purchase loan origination volume up 55% to $2.0bn
• Rentals revenue of $220m, up 26%, with multifamily revenue up 35%
• Net loss of $158m, against net income of $10m, after a $165m securities class action settlement
• Adjusted EBITDA of $182m, a 25% margin
• Average monthly unique users down 3% to 215 million, and visits down 5% to 2.3 billion
• Fourth-quarter revenue outlook of $635m to $665m

"Q3 highlighted Zillow's durability. We grew revenue and outperformed the real estate category during one of the toughest housing markets in a generation," said Jeremy Wacksman, CEO of Zillow. "That performance is powered by our brand, audience engagement, value to partners and strong growth levers across our well-diversified business. We are building a faster, easier and more affordable moving experience for renters, buyers and sellers."

The Residential segment, which brings in more than half of Zillow's revenue, sells buyers' agents connections, introductions to shoppers who ask to tour a home or speak to an agent. Agents used to buy those leads as advertising but Zillow is now routing them to Zillow Preferred, a smaller group of partner agents who pay nothing upfront and hand over a success fee of between 15% and 40% of their commission when a deal closes. Mortgages is Zillow Home Loans, the in-house lender. Rentals sells advertising to landlords and apartment managers, and is adding tenant applications, screening, leases and payments to the same marketplace.

In Q3, two-thirds of buyer connections went to Preferred partners, against about one-third a year earlier, and Zillow expects more than 75% by the end of the year and all of them in the first half of 2027. It estimates the transition took about 600 basis points off Residential's growth rate, and says that without it the segment would have grown about 2%. The rest of the decline it puts down to "higher-than-expected mortgage rates that pressured housing transaction volume". Preferred connections earn Zillow 35% more revenue per connection than the old advertising model, the company says.

Mortgages revenue grew 32% to $70m but fell short of Zillow's own outlook, and the shareholder letter says "the rapid rise in mortgage rates during the quarter caused lower conversion". Purchase loan volume still rose 55% to $2.0bn, while Zillow estimates purchase mortgage originations across the industry fell 4%.

Rentals revenue has climbed from $123m in Q3 2024 to $220m, and its share of group revenue from 21% to 30% over the same two years. Multifamily revenue rose 35% in the quarter. Zillow says a record 81,000 multifamily properties, buildings with 25 or more units, advertised with it at the end of September, up 17%, and that it sees "a clear path to more than $1 billion in annual Rentals revenue".

Some of that multifamily reach comes from the 2025 deal in which Zillow paid Redfin $100m to become the exclusive provider of multifamily rental listings on Redfin's sites, which led the FTC to sue. The case was settled in August without a trial: the syndication continues, but Redfin must be free to run its own rental advertising, and neither company can sign new exclusive syndication deals for properties with fewer than 25 units.

The net loss comes from Zillow booking $165m, net of expected insurance, to settle a shareholder class action over Zillow Offers, the home-buying business it shut down in 2021. As OMP reported last week, the gross settlement is $212.5m and still needs court approval. Adjusted EBITDA excludes the charge, just as it has excluded the cost of the FTC case since Q2.

Zillow reports 215 million average monthly unique users, down 3%, and 2.3 billion visits, down 5%. Its category share hit a record: per Comscore, cited by Zillow, it attracted 77% of average monthly unique visitors in the real estate category, which the shareholder letter calls an all-time high.

On CoStar's results call a week earlier, Andy Florance told analysts that Homes.com, which CoStar has spent heavily to build into a Zillow rival, grew revenue 50% to about $31m in the quarter, against $419m for Zillow's shrinking Residential segment.

For the fourth quarter, Zillow guides to revenue of $635m to $665m, against $654m a year earlier, with For Sale and Residential revenue each down roughly 9% to 15%, and now expects industry purchase mortgage originations to fall 10% to 15%. Rentals growth should match Q3. Adjusted EBITDA guidance of $100m to $135m compares with $149m in Q4 2025. For the full year, Zillow expects revenue growth of about 10% to 11% and Adjusted EBITDA of $655m to $690m.