Key Takeaways
- Zillow Group lost $158 million in the third quarter of 2026 even as revenue rose 7% to $724 million, according to results released November 4, 2026, for the three months ended September 30.
- The loss was driven by a $165 million Zillow Offers securities class-action settlement, while rentals revenue jumped 26% to $220 million and mortgage revenue rose 32% to $70 million.
- Residential revenue fell 4% to $419 million, and traffic slipped 3% to 215 million average monthly unique users.
The headline number looks alarming. A $158 million loss is the kind of figure that makes casual readers assume the country’s biggest home-search company is in trouble.
Read the full report, and a different story appears. Zillow’s core for-sale business stalled, its rental and mortgage businesses grew fast, and one legal settlement explains the red ink.
The $158 Million Loss Is Not What It Looks Like
Zillow reported a net loss of $158 million, or $0.70 per diluted share, for the third quarter. A year earlier, the company earned net income of $10 million, or $0.04 per diluted share.
The swing came from the settlement. Zillow’s earnings release identifies a $165 million Zillow Offers securities class-action settlement, net of expected insurance recoveries, among the items excluded from its adjusted results.
Strip out that settlement and the other items Zillow excludes, and the picture flips. Adjusted net income was $124 million, and adjusted EBITDA was $182 million, up from $165 million a year earlier, at a 25% adjusted EBITDA margin.
| Zillow Group, Q3 2026 | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
| Total revenue | $724 million | $676 million | Up 7% |
| Net income (loss) | -$158 million | $10 million | Loss driven by settlement |
| Diluted net income (loss) per share | -$0.70 | $0.04 | — |
| Adjusted EBITDA | $182 million | $165 million | Higher |
| Adjusted net income | $124 million | $113 million | Higher |
| Cash and investments at quarter-end | $707 million | — | — |
That gap between the reported loss and the adjusted profit is the first insight most coverage buries. The settlement is a real cost, and Zillow Offers has been closed for years, but it is a one-time legal bill, not a sign that home shoppers stopped using the site.
Traffic did soften, though. Average monthly unique users fell 3% to 215 million, and total visits fell 5% to 2.3 billion in the quarter.
Even after that decline, Zillow said its platforms attracted 77% of average monthly unique visitors in the residential real estate category, citing Comscore data reported in HousingWire’s coverage of the shareholder letter. For investors, that traffic is still the best free weekly gauge of how many Americans are actively shopping for a home.
Rentals and Mortgages Carried the Quarter
The growth inside Zillow no longer comes from home sales. Residential revenue fell 4% to $419 million, and total For Sale revenue was essentially flat at $489 million, compared with $488 million a year earlier.
Zillow blamed the softness on borrowing costs. CEO Jeremy Wacksman told Real Estate News that the fast rise in mortgage rates over the summer weakened the housing market.
“It’s really the velocity of the rate change that caused the contraction in the market,” Wacksman said.
That rate shock is the same one behind October’s contract slump, covered in our report on pending sales falling 16.8% in October. Rates have since eased for three straight weeks, as our Freddie Mac rate report shows, but the third quarter captured the damage.
Two businesses picked up the slack:
- Rentals revenue rose 26% to $220 million, driven by multifamily revenue growing 35% year over year. Rentals now account for roughly 30% of Zillow’s total revenue.
- Mortgage revenue rose 32% to $70 million, on purchase loan origination volume of $1.972 billion, up 55% year over year. Total loan origination volume was $1.976 billion, up 54%.
- Multifamily reach kept expanding. Zillow said 81,000 multifamily properties were advertised on its platforms at the end of the third quarter, a 17% annual increase.
In the shareholder letter, Wacksman and COO and CFO Jeremy Hofmann pointed to rentals as a long-term growth engine. “Diversifying into this space has brought us a large growth opportunity and made our business more robust,” the executives wrote.
“We see a clear path to more than $1 billion in annual rentals revenue and a substantial opportunity to keep growing across both multifamily and longtail rentals well beyond that milestone,” they wrote.
One more shift matters for anyone who buys through an agent. Two-thirds of Zillow’s buyer connections now go to a Preferred agent partner in its integrated experience, roughly double the share a year ago, and Zillow said Preferred connections generate 35% more revenue per connection than its previous lead model.
What Beginner Investors Can Do With This
Zillow’s quarter is a map of where housing money is moving while sales stay slow. Buyers who cannot make the math work are renting longer, and the companies serving renters and lenders are growing while the transaction business waits.
That read lines up with the supply side, too. Our coverage of new apartment completions falling 27% in 2026 shows fewer new rentals arriving just as renter demand holds up, and our breakdown of the hidden costs of owning a home shows why many would-be buyers stay put.
Here is how to use this report:
- Separate one-time losses from operating trouble. Before reacting to any earnings headline, find the settlement, impairment, or restructuring line. Zillow lost $158 million on paper and still produced $124 million in adjusted net income.
- Follow the renter. Rentals at roughly 30% of Zillow’s revenue, growing 26%, tells you demand for rentals is not a side story. Underwrite small multifamily and single-family rentals in your market with that demand in mind.
- Use Zillow traffic as a demand check. Unique users fell 3% and visits fell 5%. When you price a listing or a flip, assume a slightly smaller buyer pool than last year until that trend reverses.
- Shop the integrated mortgage carefully. Zillow’s purchase originations rose 55% to $1.972 billion, so its lending arm is competing hard. Get its quote, then make two local lenders beat it in writing.
- Ask how your agent gets Zillow leads. With two-thirds of buyer connections now flowing to Preferred partners, the agent on the other side of your deal may be paying a referral fee after closing. That is worth knowing before you negotiate.
Zillow did not have a good quarter for home sales, because almost nobody did. It had a revealing one: the loss was legal, the growth was rentals and mortgages, and the audience, while smaller, still dwarfs every rival.
Data: Zillow Group third-quarter 2026 results, released November 4, 2026, for the three months ended September 30, 2026, including the supplemental financial tables in Exhibit 99.1 to its Form 8-K.
