Zillow Group Stock Price, News & Analysis

Zillow forecasts a more active housing market in 2025, predicting 2.6% home value growth and 4.3 million existing home sales. While mortgage rates are expected to ease, their unpredictability will continue to impact buyer decisions. The market is projected to become more buyer-friendly, particularly in the Southwest, with increased inventory providing more negotiating power. Home buyers are embracing smaller, 'cozier' spaces as an affordable alternative. In the rental market, the historic multifamily construction boom is expected to slow down in the second half of 2025, potentially reducing rent concessions. Property managers are adapting to an older renter demographic (median age 42) with increasing pet ownership (58% of renters).

Zillow's latest market report shows home buyers gaining leverage nationwide as competition eases in October. The shift is most prominent in Florida, Texas, and New Orleans, with Pittsburgh and Louisville joining 11 other major metros where buyers have an edge in negotiations. Monthly mortgage payments rose 2.8% month-over-month in October, though they remain $179 lower than last year. Inventory continues recovering from pandemic lows, now 28% below pre-pandemic norms - the smallest shortfall since September 2020. Markets with stronger inventory recovery and new construction are seeing softer home value appreciation, with the largest monthly drops in Austin, Dallas, Atlanta, Tampa, and San Antonio.

A new Zillow analysis reveals that middle-income households could afford more homes in September 2024 than in any month since February 2023. When mortgage rates averaged 6.18% in September, 27.7% of homes for sale were affordable, up from 22.7% in May when rates were at 7.06%. However, rates have since climbed back to 6.78% by mid-November, highlighting market volatility.

In October 2024, all 50 largest metro areas showed improved affordability compared to the previous year. Pittsburgh led with 72.1% affordable listings, while Los Angeles remained least affordable at 1.6%. Sun Belt markets, particularly Austin, saw the largest year-over-year improvements in affordability.

Zillow has launched BuyAbility, a real-time affordability tool on their app that helps home shoppers instantly determine if they can afford and qualify for specific listings. The tool, powered by Zillow Home Loans, provides personalized estimates based on users' financial information and current mortgage rates. When mortgage rates shift from 7% to 6%, a median-income household's buying power increases from $380,000 to $420,000 with a 20% down payment. According to Zillow data, 79% of recent buyers prioritize staying within budget, and in September, 27.3% of listed homes were affordable for median-income households, up from 22.7% in May when rates peaked above 7%.

Zillow Group has promoted Jun Choo to chief operating officer (COO). Choo, who joined Zillow in 2015 through the Trulia acquisition, will oversee the company's for-sale business strategy, operations, Enhanced Markets, Mortgages, and real estate industry product lines. With over two decades of leadership experience, Choo has been instrumental in creating the Connections platform, developing Premier Agent market-based pricing, and launching Zillow Showcase. Additionally, President Susan Daimler and SVP of Product Matt Daimler have announced their departure from the company after 12 years of service.

Zillow Group (Nasdaq: Z, ZG) announced its participation in the RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference. CEO Jeremy Wacksman and CFO Jeremy Hofmann will engage in a fireside chat on Tuesday, Nov. 19, 2024, at 8:45 a.m. ET / 5:45 a.m. PT. The presentation will be accessible via live and recorded webcasts through the Events & Presentations section of Zillow Group's Investor Relations website.

Zillow's 2025 home trends highlight a blend of modern technology and nostalgic charm. Emerging trends include whole-home batteries, cozy living spaces, and home libraries. Mentions of whole-home batteries surged by 62%, and solar panels by 18%. Electric vehicle chargers are up by 34%, and induction cooktops by 5%. The term 'cozy' increased by 35%, indicating a preference for smaller, purpose-driven rooms over open floor plans. Nostalgic elements, such as floral patterns and antique furnishings, rose by 14%, and vintage mentions by 9%. Home libraries and Victorian-era sculleries are also gaining popularity. Climate resilience features are crucial, with mentions of flood barriers up 22%, seismic retrofitting by 20%, and water catchment systems by 19%. Drought-resistant turf yards increased by 14%. Spa-inspired wet rooms are appearing 19% more often, reflecting a growing focus on wellness design.

Zillow Group reported strong Q3 2024 results with total revenue of $581 million, up 17% year over year, exceeding company outlook. Residential revenue grew 12% to $405 million, Rentals revenue increased 24% to $123 million, and Mortgages revenue surged 63% to $39 million. The company reported a net loss of $20 million (3% of revenue) and Adjusted EBITDA of $127 million (22% of revenue). Traffic reached 233 million average monthly unique users, up 1% year over year, with 2.4 billion visits, a 3% increase.

Zillow's recent survey reveals that 45% of home buyers who purchased in the past year secured mortgage rates below 5%, despite current rates hovering near 7%. The most common method (35%) was through special financing from sellers or builders. Other strategies included rate buydown contingencies (26%), post-purchase refinancing (25%), and borrowing from friends/family (23%). This comes as mortgage rates surged from 2.65% in 2021 to 7.79% in fall 2023, causing typical mortgage payments to rise 115% from pre-pandemic levels.