If you had one word to describe the current housing market, what would you choose? Depressed. And the reason for that, which we've read lots of headlines about, is affordability. High home prices, elevated mortgage rates, lack of supply. A lot fewer people than normal are moving in a given year. This week on Bold Names, we're talking to Jeremy Waxman. He's the CEO of Zillow. The real estate site has its finger on the pulse of the national real estate market. And as Jeremy just mentioned, there have been better days. So what should we expect this year? That's next. From the Wall Street Journal, I'm Tim Higgins. And this is Bold Names, where you'll hear from the leaders of the bold name companies featured in the Wall Street Journal. Today we ask, how is Zillow changing the way you hunt for your new home? Jeremy, thanks for joining Bold Names. I want to take this opportunity to take a temperature of the nation's real estate market. Your data on Zillow.com, those buyers and sellers out there, gives you such a window into the state of the housing industry. What are your economists telling you about the housing market in 2026? Well, thanks for having me. I'm happy to be here. Our economists are saying that there'll be a little bit of improvement in 2026 versus last year, but we're still in a really challenged housing market. When I talk to pollsters out there, they say affordability is one of the biggest issues that they hear from voters. We see it on all sorts of topics from healthcare and more importantly, probably housing. And I think Zillow is in an interesting spot in this, right? You get what, 250 million unique visitors to your website and app every month. A lot of people out there, window shopping, dreaming. And I think they see those houses, those big prices, and it confirms really that they can't grasp that American dream of home ownership. As you think about the affordability issues, what's driving it? Why do we have this problem? You're right. We do have most of America on Zillow. Real estate's a hobby for many. Right. The average person buys and sells a home less than once a decade. But a hundred, you know, hundreds of millions of folks are on Zillow and they're shopping and they're dreaming and they're escaping. And it's a great pastime because you never know when you're going to find the right one. But what the data tells us is the big root cause of the affordability challenge is really an availability challenge. It is a lack of supply. Coming out of the global financial crisis back in 2008, 2009, we started building less homes than household formation. And we've accumulated this deficit of Zillow estimates. Almost 5 million fewer homes have been built to keep up. And so any time in a marketplace when you have less supply than demand, it makes it more unaffordable for that demand. You marry that with mortgage rates that have elevated, and it makes it even more unaffordable. So mortgage rates are higher, means your monthly payment is higher, you can afford less. And people out there, there aren't homes to buy, but people need to sell their homes. What's it like for them out there? Are they not finding buyers? So for a while, our economists would say it has been a seller's market just because of that lack of supply. But because of the affordability challenge, it has really shifted. And the story going into 2026 is really more of a local one. but markets are starting to turn. And what sellers are finding is the prices they thought they could get in many of these markets aren't what they can get in today's markets. It's easy to look in the rearview mirror at what a home sold for and the market has moved. But the markets where you're seeing population growth and demand strong, that's still where you're seeing a strong seller's market, especially we're seeing listings be down. So markets with rising home prices, we just put out sort of best markets to buy in. And that's the flip side of that. I mean, I think a seller right now, you want to be in San Francisco. I've talked to real estate agents who are seeing bidding wars. I heard from a real estate agent the other day who was talking about a house being listed for $2 million, eventually sold for $4 million. If you're a buyer, you're sweating it out. Where do you want to be if you're a buyer? What are the good markets? Yeah, the hot buyer's markets are the markets that are kind of satellite to major cities, right? So think Hartford, Connecticut. Those are the markets where home prices are still going up. But you contrast that to places like the Sunbelt, where they've built nicely over the last five or six years, taken Austin, Texas, take the Southeast. You are seeing home prices come down. You're seeing rents come down. And so it is more affordable for the buyer. Yeah, Indianapolis, Atlanta, Charlotte lead the 10 top markets where buyers will see the friendliest conditions, according to the list you guys put out. You know, it's interesting because sales are stuck at around a 30-year low. for those who do venture out and buy, the data would suggest they are getting some discounts in some of those areas, according to a recent report by the Wall Street Journal. So it's a weird, if you can afford to buy, maybe you can get a deal, but a lot of people can't afford to buy. Well, and that's the thing about the housing market. I mean, it will return to a growth industry over time. And we talk about how off it is from pre-pandemic, but there are still 4.1, 4.2 million homes trading, that's millions of Americans moving in a given year. And those are the folks that have to move. There's a job change. There's a life event. You're talking about this regionality of the market, which I think is one of the reasons why I go to your site so often. I see it as kind of a barometer of regional economies. There are several communities I follow throughout the US. I know very well. I keep tabs on them. So I'm always going to this neighborhood and that neighborhood on Zillow and seeing what the inventory is like, what the prices are like, you know, I guess that's the way I'm spending my free time. Do you have any insight into how long people are staying on your website? I mean, we see folks using the site for months and months before they pull the trigger. And then we actually see folks stick around after I think that's one of the things that's counterintuitive is after you buy, you kind of look through your fingers to say, did I make the right decision? And you kind of obsess about the transaction on the street that happened after you bought. And so we see that that shopping pattern as well. But as you said at the beginning the reality is even if you not in the transaction it so fun to think about what out there to understand more about your neighborhood to look at where you might want to live someday even when you not in a transaction mindset So, I mean, this is the interesting thing about your site, right? You have, what, 250 million users on average each month coming in there, a ton of people. It's so powerful. But one of the perennial questions, of course, for you and your predecessors has always been, how do you turn that strong brand into profitability? Now, we're talking days before your fourth quarter earnings, so I know you won't discuss those. You can't discuss those. But analysts are expecting that Zillow is going to finish 2025 profitably, the first annual net profit in more than a decade. Let's talk about the first nine months of 2025. What drove this turnaround? out? Yeah, I mean, I'll start at the top. The strategy for Zillow is to turn more of that audience you talked about into transactions. We are incredibly fortunate that we have the majority of America is on our site, but only a small share of those folks when they buy or sell or rent, they use our transaction services. They connect to the agents that are advertising with us. They connect with the property managers that are on Zillow. They use our mortgage services. and our revenue growth comes from just helping a few more percentage of them use our services or find the professionals that they need from Zillow. And that's working really well over the last couple of years, both in rental and for sale. And that's why you're seeing Zillow put up double digit revenue growth against this housing market we've talked about that's flat, right? The market is not helping Zillow grow. Zillow is growing its share of transactions in a flat housing market. And that's why you're seeing revenue growth. That's why you're seeing margin improvement and why you're seeing net income. It seems to me that rental listings are something of a moat, right? It's not like real estate listings where there's the multiple listing services out there where you get the houses that are for sale in your community that you then put onto the website. But you kind of have to sort of build that list for rentals. The rental market is very different than for sale market. As you said, there is no national database or even local databases of all rental listings. And that was really the problem we set out to solve when we got into rentals a while ago. A renter has an even more compressed timeframe, right? The stress is even higher because you have to decide quickly, are you going to renew your lease? Are you going to move? Many renters are thinking, could they buy or not? And so Zillow set out to just help answer those questions. Well, to answer both those questions, you have to have rental listings and for sale listings and affordability tools, and you have to have as much of the inventory as possible. And so we built a platform for landlords and for property managers to provide all their listings to Zillow and slowly built what is now the largest database of all listings. No one site has them all, but Zillow's brand is now trusted by renters to have the most rental listings. And that's why we have the largest audience in rentals. And because we largely solve the problem of if you need to find a rental, increasingly you're going to find it on Zillow. Just ahead, Jeremy explains why Zillow is building what he calls a super app for housing. We have this expectation when we pick up our phone and we open the app, you should be able to do everything in the app. And the app should help you with any question and get you all the way through the transaction. As you pointed out, real estate doesn't work that way yet. Yet. Stay with us. Another part of the routine of Zillow is mortgages, right? Number of years ago, you got into the mortgage business. What are the benefits of financing a home with Zillow compared to a traditional lender? Yeah, many folks don't know that Zillow originates mortgages and can offer you a mortgage. The reason we got into that business, the reason we do most things is to solve a consumer need, right? What a buyer needs when they go and buy a house is they need a great agent and they need a loan. And then they need software and tools to help them complete the transaction. And that's what we're trying to build. We're trying to build an integrated experience so that a buyer can find the home they want on Zillow, hire their professional, line up their financing, converse and message with their professionals all inside the Zillow app all the way to close. And so you can't really provide that integrated one-stop shop if you aren't providing the mortgage, right? They ideally want to be able to transact with that transparently, online, digitally, modern. And so that's what we're building is if you use our services, we can offer you something that's more seamless, that's more efficient, and that's more in your control. Housing super app is what it sounds like. That's right. That's the term you like to use, and everybody in tech likes to think about creating some sort of super app. I mean, you talk to Uber, as I do, they want to have the Uber app be everything that's about mobility and getting deliveries and all sorts of things. That's right. And you gave some other category examples. We have this expectation when we pick up our phone and we open the app, you should be able to do everything in the app. And the app should help you with any question and get you all the way through the transaction. As you pointed out, real estate doesn't work that way yet. Yet. Right. Because it's complicated. That's what you're working on. It's complicated. One of the big complicating factors is the role that real estate agent plays, right? And I think we've talked about some of your businesses here, but the core part of Zillow's business is lead generators for real estate agents. This is the primary revenue driver, has traditionally been, I think at one point it was something like 70%. It has come down now as you expanded the pie. It's a weird time to be in the real estate agent business, right? It's an industry that's reeling following that landmark legal sentiment around real estate agent commissions. It's been a major shakeup in the real estate world today. The National Association of Realtors not only agreed to pay $418 million, but also agreed to eliminate the 6% Realtor Commission. Yeah, this is a landmark antitrust settlement in the housing market that will fundamentally change the way real estate agents are compensated when you buy or sell your home. What's your view on where you can play in this new world? Yeah, you're right. The first decade of Zillow, it was really lead generation, right? We would attract buyers and sellers and an advertiser would pay to attract those customers. And as soon as we connected you, we were hands off. We were done. And what we learned after a decade was that was a great initial business but it didn actually solve the consumer problem of helping through the transaction And so we actually shifted that business And it now a revenue share It a partnership with those agents So more and more of our agent revenue is no longer traditional upfront advertising. It's actually performance-based, right? We only make money if the agent we connect you with ends up helping you transact, right? And then we share in that revenue together. and aligning our interests with those agents has really helped us build this integrated, you know, this housing super app. It makes sure we find the best agents, that they are great service professionals, that they are using the modern digital tools you want, that they're using Showcase to showcase your listing online, that they meet your needs. That's how they win more business. And then that's how we grow our business. And to your question, it has been a tumultuous few years in the real estate industry in terms of all the changes. But the thing that has not changed is the consumer's demand for better and better service. And you're adding more services for real estate agents, as I understand it. And the first half of this year, Zillow Pro is coming out with a Zillow Pro. That's right. So the other thing folks probably don't know about Zillow is how much software we provide to the agents, the loan officers, the property managers that you all work with. So we're all using Zillow as consumers. Oftentimes, the agent who's conversing with you is using our software. They're using a CRM, a customer relationship management system called Follow-Up Boss. So when they're messaging you, when they're sending you follow-ups, when they're helping you triage homes, they're using our software. And we do that because we're helping them run their business more efficiently, right? So the software and tools we provide them helps them run their business better. And then that's how we help participate in more transactions. So it helps them understand who's looking at houses, helps them with automatic follow-ups. That's right. Do just a better job of paying attention to those details, which I think is what is somewhat scary about the near-term future for a lot of people with the kind of democratization of AI. Will AI be doing more and more of this? And so really, you're a company that was an early adopter of this kind of technology. So you must have a thought on where the next generation of AI is going. We do. You're right. I mean, I joined Zillow in 2009. The Zestimate is what turned me on to Zillow back before I joined. Did you look at your house beforehand? Oh, for sure. Did they ask about it in the job interview? They did not. No. But that was 2006 Air AI, right? That was machine learning. And we've been working on AI and real estate really for 20 years. And it has been really fun to work with a team of innovators and technologists that are leaning into any of the new waves of technology. We did that with mobile when I got here, right? Steve Jobs held up the iPhone and we were a desktop only search engine. And we pivoted the whole company and ran it mobile because we saw it as the future. And to your point, generative AI is going to rewire how we all do our jobs. To the question on real estate, though, I do think real estate is a pretty unique category. As you pointed out earlier, it's so complex. It's so local. It requires so many parties. It's so regulated. AI actually has tremendous promise to just take away the back office work and the waste work so that, yes, we as buyers and sellers can have the remote control in our hand, do more for us. But more importantly, when we hire the professionals to help us get it done, they can do the same thing. And I'll give you a very simple example. One of the most widely used AI features we've piloted in last year by our agents is something called smart messages, right? Agents are taking tons of calls. They have tons of follow-ups. It's like an endless to-do list. And can we short-circuit a little bit for them by listening to what happened and suggesting a follow-up message? Of course, they can still customize it. Ideally, we can learn their voice. We are seeing millions and millions of these smart messages be sent, and they are driving improved outcomes, right? They help the agent sound smarter. They help the agent respond faster. And so it's a very simple thing, but it shows the power of like taking away one of those cognitive load tasks or one of those friction points that a small business professional, an entrepreneur doesn't want to do. They want to do the thing they do well. And so we see the power of AI as really helping pull out a lot of the waste and a lot of the inefficiency and redundancy in the system, which will make it easier. Yes, for the buyer and seller, but also for the agent you're going to hire. After the break, Jeremy addresses the complaints that Zillow has become too big and too powerful. Anytime you have success in a category and you become a brand that is synonymous with the category, you attract attention and you attract legal challenges and scrutiny. That's next. Zillow's role in the new real estate economy, real estate 2.0, if you will, is under question, is under attack. There's several legal challenges over the power of its app and its website in the marketplace. One of them is brought by real estate powerhouse Compass. And they are getting at this issue of clear cooperation, the idea that listings in a market are available to everyone. And that's where you all get your listings. And Compass wants to have that, they want to have the ability to be exclusive, right? Because their agents don't have to tell the world. You're against it. This is a lawsuit now. I know you're not going to get into the lawsuit, but I'm just curious more broadly, why is Zillow against agents having exclusive listings? Everything we do at Zillow is about what is for the benefit of the consumer. And putting the internet back in the box or hiding listings so that you have to go sign up to work with a specific company to see and to get access is not great for buyers or sellers. So that's why we took a stand and said we're against it. Zillow will get the majority of listings the way we always have. We got them in a variety of ways over our 20 years because most sellers are going to want their home to be broadly exposed on the internet. But the reason we took a stand for the industry, not just for Zillow, is to protect that transparency that we talked about. Before the internet, you had to pay for access. That wasn transparent That wasn empowering for buyers and sellers It created all kinds of friction for the consumer And trying to go back to that trying to hide listings and put them back in a box is not pro So that the reason we took a stand And it the reason we advocate for continuing to strengthen transparency, which ultimately empowers us as buyers and sellers and allows us to hire the best professionals to meet our needs. If Compass was here, I think they would argue that these exclusive listings allows a home owner to test the market, that sort of thing. But I think really the bigger issue is the role that Zillow plays in connecting buyers and sellers. What's your general response to this idea that you guys have become too powerful? I mean, I think anytime you have success in a category and you become a brand that is synonymous with the category, you attract attention and you attract legal challenges and scrutiny. The good thing for Zillow is we're really able to just focus on our business and focus on our strategy. And we have found that if you spend time with buyers and sellers and understand what the problems they're having are, and you work backwards from trying to solve those problems, however the shifts of technology come, you build a great business and you build a great brand people trust. So let's talk about how and what needs to help the real estate market. How do we improve the affordability of things? Yeah, the affordability challenges are really availability challenges. right? Supply is really the great solution. There are things we can all do on the margin to help on affordability, any relief in mortgage rates, any incentives to help first-time home buyers, like all those things can help the buyer. But what really has to happen is we have to start to build more homes in more places. We have to make it easier for folks to build more homes to help supply come online. That's piece one. And then as rates come down, you will see sellers finally decide to get unstuck from their mortgage. Many sellers feel trapped in their low mortgage rate and they're delaying selling because they don't want to assume a higher mortgage rate. So as that spread comes down, you see existing home supply come online. So let's talk a little bit about the supply issue. In Washington, there's pieces of legislation that are working their way through Congress, which aim to tackle some of these issues that you've raised, especially around deregulation, removing the so-called red tape that slows the ability to build more houses. What do you think of that legislation? What do you think of that? Is that the right fix? Anything that can help streamline and make it easier to build is going to help. The challenge is it's really going to have to be done at the state and local and county level. So federal legislation ideally can help, but it has to then be paired with state and local legislation. And you kind of see that playing out. There are states that have done a better job over the last 10 years that have had less regulatory red tape, that have had zoning and programming reform, that have provided tax incentives to get builders going. And they've built a lot, and you've seen the results. Yeah, I think a lot of people are against red tape, if you will, against the idea of these regulations until it's their neighborhood and until it's their backyard, Right. And that we see that time and time again. One of the challenges is that people are fighting new housing projects, lower income housing. They just don't want it in their neighborhood. It's I mean, it's a tough issue when you think about it locally, but it's an important issue to solve. And there are ways to solve it. We authored a playbook called Build the Middle that talked about how to create the right permitting and zoning reform to enable that, you know, dense urban housing in areas that are already dense and urban helps the entire economy. Right. And there are cities that are doing that really, really well. So the reality is we have to we have to make progress on this if we want to get out of the out of the unbalance that we have. Yeah, it's part of a broader debate going on in the country, I think, about homeownership. I mean, do we need to even think rethink homeownership for for so many people? it's so tied to the idea of wealth and kind of future. Other countries, it's not that case, right? Is that some of the challenge? Is that for a lot of people in the U.S., buying a house is seen as an investment, a gateway to retirement security. Maybe it'd be a little bit better if it was turning over a few years. Our data would say that every generation still has a dream of home ownership. And we haven't seen that change. What has changed, as you point out, with affordability is people are having to delay. And the idea of a starter home is kind of gone. You're waiting and saving up and scratching your way into your first home. But we still see across all demographics, the desire to be a homeowner is there. And you obviously see that in the data on Zillow as well. You see the demand and the desire to think about how can I get it done. Our job at Zillow is to just help those who can, right? And then help try and make it so that more can. And a huge part of that is education. So we talked a lot about what can we do regulatorily, but there's also helping educate first-time homebuyers on the tools that are available to them. This idea that you have to put 20% down is kind of an old adage that isn't true anymore. The average first-time homebuyer is putting a few percentage points down, and there are tools and programs that help them get into a mortgage that they can start with. And so education for us becomes as important a tool as all the software that we build. Well, Jeremy, thanks so much for joining us. Thanks for having me. We reached out to Compass and a spokesman reiterated that the company is suing Zillow over its ban on listings that aren't on Zillow for more than 24 hours. And that's bold names for this week. Our producer is Danny Lewis. Our video producers are Kasha Broussalyan and Alexis Moore. Our fact checker is Aparna Nathan. Michael Laval is our sound designer. Jessica Fenton wrote our theme music. Our supervising producer is Katie Ferguson. Additional help from Jana Heron and Alexis Green. Our development producer is Aisha Al-Muslim. Chris Zinsley is the deputy editor. And Felana Patterson is the Wall Street Journal's head of news audio. For even more, check out my columns on wsj.com. We've linked them in the show notes. I'm Tim Higgins. Thanks for listening.
