Zillow Mortgage Purchases Rise 55% Despite Revenue Miss
Zillow Home Loans grew third-quarter purchase volume while industry originations declined and mortgage revenue fell short of analyst forecasts.
Updated on Nov. 5, 2026 in Residential
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Zillow Home Loans grew purchase mortgage volume 55% in the third quarter while industry purchase originations declined about 4%, according to Zillow. The company reported mortgage revenue of $70 million, missing analyst forecasts of $81.3 million.
Why it matters
The divergence shows Zillow gaining share in a shrinking purchase market, a shift that depends on how its Preferred program converts buyer connections into loans. The quarter also reflects how sharply rising rates reduced conversions across the housing market.
Zillow's third-quarter purchase loan originations reached $1.972 billion, up from $1.276 billion a year earlier, while the company posted a $158 million net loss compared with $10 million of net income in the prior-year quarter. Zillow's own estimate puts industry purchase origination volume down 4%, but the company did not provide an independent source for that figure.
The players
Zillow Home Loans
The mortgage arm of Zillow, the online real estate marketplace, which originates home purchase and refinance loans.
Keefe, Bruyette & Woods
A financial services investment bank that publishes analyst forecasts for mortgage and financial companies, including Zillow.
The details
Zillow said it expanded the share of buyer connections routed through its Preferred program, an invitation-only network of real estate agents, and under that model it captures mortgage revenue at origination, which can come six to 12 months later. Chief executive Hoffman attributed the revenue miss to rate shock that lowered conversions, while Harter tied the earnings miss to a weakening housing market and the transition from the legacy ad model to Flex.
Timeline
Q3 2025: Prior-year quarter used as the comparison for Zillow's purchase volume and net income.
Q3 2026: Zillow reported 55% purchase volume growth and a $158 million net loss.
End of Q3 2026: A sharp increase in mortgage rates occurred.
Start of Q4 2026: The sharp rise in mortgage rates continued.
Q4 2026: Zillow guided to a 10% to 15% industry purchase decline and 20% revenue growth.
Market Shift
Zillow's move from its legacy advertising model to the Flex and Preferred programs ties mortgage revenue to later transaction closings, which delays the revenue recognition that analysts were modeling this quarter. The 55% purchase growth against a shrinking industry suggests Zillow is capturing share as its transaction-linked model matures.
Buyers working with Zillow's Preferred network may see loan offers tied to a shrinking purchase market, where the company expects a 10% to 15% decline in industry originations in the fourth quarter. Homebuyers comparing lenders should weigh Zillow's share gains against the broader market slowdown when shopping for rates.
The takeaway
Mortgage volume can rise for one lender while the overall purchase market shrinks, so buyers should compare rate quotes directly rather than relying on a single company's growth figures.
What happens next
Zillow expects fourth-quarter mortgage revenue of $55 million to $56 million and total revenue of $635 million to $665 million, with the results due when the company reports that quarter.
Further reading
Explore more Residential real estate news for context on the purchase market shift.
Source note: This article includes information reported by National Mortgage News.
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