Real estate’s biggest name is struggling, just like everyone else, but company leadership is promising that it—and the industry—have ways to hang on amid a tech revolution, a sluggish market and legal woes the company claims are in the past now.

Speaking to investors after reporting earnings for Q3 2026, Zillow CEO Jeremy Wacksman said lawsuits are “not impacting our business,” with CFO and COO Jeremy Hofmann adding that legal costs are “normalized” going forward as the company hunkers down for what is expected to be a tough environment for real estate.

“It’s not obvious to us how things are necessarily going to improve,” Hofmann said.

Zillow’s report comes as mortgage rates remain elevated from earlier this year and existing home sales are on track to come in around 4 million—down more than 20% from pre-pandemic norms. The company’s stock fell sharply, down around 17% in after-hours trading.

The company still faces a proposed class-action lawsuit from a real estate agent who claims Zillow’s “monopoly power” inflates fees and commissions. A judge ruled in September that the lawsuit could move forward.

Democratic lawmakers previously offered pointed criticism of some of Zillow’s business practices, which are also used by at least some other portals, as the party made big gains in the midterms yesterday.

On the tech side, Zillow said it has not seen major impacts from increased use of AI by consumers, or Google’s ongoing push into residential real estate.

“(Google’s program) is very different than a ‘Preferred’ connection and an integrated transaction and helping agents grow their business that way. So we haven’t seen any impact from it today, even though it’s supposedly live nationwide,” Wacksman said.

As the company previously announced, agent partners are all being transitioned from other programs to the company’s Zillow Preferred service, which executives said is integrated with Zillow Home Loans.

The transition is expected to be fully implemented by the first half of 2027, and 75% complete by the end of this year.

The context

Zillow’s residential for-sale revenue was down 4% year-over-year, $419 million in Q3 2026 compared to $435 million in Q3 2025. On the other hand, mortgage revenue grew 32%, and the company touted durable rental income, up 26% from the same period last year.

Overall revenue came in up 7% from last year at $724 million, with the lawsuit payment—$165 million after insurance covered part of the settlement—dinging the top—line. Outlook for Q4—historically the slowest for real estate—was $635 to $665 million, roughly the same as last year’s reported $654 million.

Late last year, Zillow was targeted by a high-profile class-action firm with claims from recent homebuyers focused on those “lead diversion” and loan referral practices. A judge initially threw that lawsuit out (though plaintiffs are seeking to revive it).

The company also agreed last week to pay $212.5 million to settle a lawsuit over its long-shuttered iBuying business, something the company said it was happy to put behind it.

“I think we’ve been pretty consistent and transparent to the degree we could be, that we didn’t expect these cases to impact business. And I think as you’re seeing them resolve, get settled, move on, you’re seeing that come to light. They’re not impacting our business,” Wacksman said.

As far as the macro picture, Hofmann said that without any sign of a market rebound, “its our job (to) just keep driving on the underlying structural growth drivers we have,” including software and rentals that are not rate dependent.

“We’re also fortunate in that the business has diversified pretty rapidly over the last four or five years,” he said.

Addressing the use of agentic AI and potential changes in how consumers search for homes, Wacksman and Hofmann both promised that Zillow’s model was built to thrive in this new environment.

“We see the human experiences remaining human,” Wacksman said. “The dreaming and shopping part is the part you want to do and the transaction part is the part you need to do, and Zillow is the best place to do both those things…and then our ability to make the professional’s job easier so they can serve the customer better is where we’re focused, and why we are so confident in the strategy.”

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