Zillow may be facing calls for investigations into some of its practices by consumer advocacy organizations and federal lawmakers, but the real estate listing portal giant is doubling down on its belief that it is “building the faster, easier and more affordable moving experience.”
“As more consumers and professionals use Zillow to move from dreaming to transacting, the old real estate experience will feel slow, difficult and expensive by comparison,” Zillow CEO Jeremy Wacksman and Zillow COO and CFO Jeremy Hofmann wrote in a letter to shareholders published on Wednesday.
Despite this confidence, Zillow may be facing some headwinds. The company said that in the third quarter of 2026, visitor traffic to its apps and sites was down 3% during the quarter to 215 million average monthly unique users, while overall visits were down 5% annually to 2.3 billion according to Comscore data. Despite the declines, Comscore data shows that Zillow attracted 77% of average monthly unique visitors in the real estate category in Q3. In addition to this, the company said it has found that its AI search mode is deepening engagement, with visitors who use this option spending nearly three times as long as those who don’t on the site.
Zillow said that AI mode is now available to 100% of its signed-in users. The company said it was also exploring ways to use AI to make real estate professionals more productive and to help its internal engineers, who are using AI to ship 60% more changes to production than they did in 2024, according to Zillow.
“Buyers spend an average of two to three hours a week with us over about five months — and then for most, Zillow software and services power their transaction: the majority of residential real estate transactions in the U.S. run through our professional software,” the executives wrote. “Because of Zillow’s transaction infrastructure, our agentic AI does more than guide the shopping experience people love; it assists consumers and professionals throughout the transaction itself.
Mixed financial results
In addition to the decline in traffic, Zillow also reported a net loss of $158 million for the quarter, down from a $10 million net income generated in Q3 2025. This decline came even as revenue rose 7% annually to $724 million.
Zillow’s Preferred lead referral program is one of cornerstones of its revenue generation engine. The company reported that in Q3, two-thirds of buyer connections came to a Preferred agent partner in the integrated experience, roughly double what it was a year ago. Zillow said it was on track for Preferred to represent over three-quarters of connections by the end of the year, with it anticipating reaching 100% of connections in the first half of 2027. Zillow also noted that Preferred connections generate 35% more revenue per connection that its previous lead generation model.
Even with the growth of the Preferred program, Zillow’s for-sale revenue was flat year-over-year at $489 million. In addition to this, its residential segment recorded a 4% annual decline in revenue to $419 million, which the company attributed to higher-than-expected mortgage rates putting downward pressure on housing transaction volume.
Bright spots in Zillow’s Q3 earnings report occurred in its mortgage and rentals segments. Zillow’s mortgage rose 32% annually to $70 million, due to a 55% increase in purchase loan origination volume to $2.0 billion.
In markets where Zillow has integrated its mortgage product with its Preferred program the longest, Zillow said adoption rates of Zillow Home Loans is around 20%.
“We are also making Zillow Home Loans a trusted lender for Preferred agent partners’ entire book of business, not just for clients they connect with through Zillow,” Wacksman and Hofmann wrote.
Rentals revenue was up 26% year-over-year to $220 million, which the company attributed to multifamily revenue growing 35% year over year. Zillow said its rentals segment now accounts for roughly 30% of its total revenue, up from 21% two years ago. Additionally, the company noted that 81,000 multifamily properties were advertised on Zillow at the end of the third quarter, a 17% annual increase.
“Diversifying into this space has brought us a large growth opportunity and made our business more robust,” the executives wrote. “Our rentals strategy is to offer the broadest, most comprehensive inventory from single-family homes to large apartment buildings, and to streamline the transaction experience for consumers and housing providers.”
Executives added that they believe Zillow is still just scratching the surface of the opportunity presented by the rentals sector.
“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,” Wacksman and Hofmann wrote.
Bright spots
The company also highlighted the performance of some of its other offerings, noting that its CRM product, Follow Up Boss, recorded roughly 141,000 monthly active users in Q3, up 16% annually. In addition to this, Zillow said over 800 brokerages had signed up for its pre-marketing product Zillow Preview and its listing enhancement product, Zillow Showcase, was on 5.4% of all new U.S. listings.
“Even as housing conditions deteriorated sharply, Zillow kept growing and outperforming, powered by our brand, audience, value to partners, disciplined cost management and strong growth levers across our well-diversified business,” Hofmann and Wacksman wrote. “These advantages are driving our performance through an exceptionally difficult macro environment today and position us to accelerate when conditions improve.”
