Zillow shares sink about 16% after sales miss in housing slump

The loss: Zillow reported a net loss of $158 million, or 70 cents a share, compared with a $10 million profit a year earlier. Most of the swing came from a $165 million charge, net of expected insurance, to settle a shareholder class action over Zillow Offers, the home-buying business it has since shut down. Excluding that and other items, adjusted net income was $124 million.

The stock: Shares fell 15.6%, or about 16%, to $29.06 right after the release, StockStory reported. Investing.com put the after-hours drop at 15%, and RISMedia at about 17%, at different points in the evening.

Where the money came from: Sales tied to buying and selling homes were flat at $489 million. Its residential segment, the largest piece, fell 4% to $419 million, which Zillow blamed on higher-than-expected mortgage rates holding down home sales. Its mortgage business grew 32% to $70 million, and rentals grew 26% to $220 million, now about 30% of total revenue.

What the company said: CEO Jeremy Wacksman called it "one of the toughest housing markets in a generation" and said Zillow still outgrew the real estate industry, which grew 1% in the quarter by the company's estimate. On the earnings call, finance chief Jeremy Hofmann was more cautious about the months ahead: "It's not obvious to us how things are necessarily going to improve," RISMedia reported.

Traffic and outlook: Visitors to Zillow's apps and sites fell 3% from a year earlier to 215 million a month, and visits fell 5% to 2.3 billion, the company said. Zillow forecast fourth-quarter revenue of $635 million to $665 million, roughly in line with the $654 million it reported a year earlier, RISMedia reported. The Seattle-based company, headquartered in the tower at 1301 Second Avenue downtown, also still faces an antitrust lawsuit from the Federal Trade Commission and state attorneys general.

What's still unknown: Whether mortgage rates ease enough to lift home sales next year, how the FTC case and a pending agent lawsuit play out, and whether Google's push into home search pulls visitors away. Wacksman said Zillow has seen no impact from Google's program so far.

Results are from Zillow Group's Nov. 4, 2026 release for the quarter that ended Sept. 30. The $754.4 million revenue estimate is the analyst consensus cited by Investing.com. After-hours share moves were reported at 15% (Investing.com), 15.6% (StockStory) and about 17% (RISMedia) at different times and can change before Thursday's open.