Zillow’s business model has always depended on one thing: having the listings people want to see. That advantage is now under pressure from two sides at once.
Zillow built its dominance by bringing for-sale and rental listings under one roof, attracting the audience that landlords, property managers and sellers pay to reach. It was a powerful loop. Now Zillow’s own moves suggest that grip is starting to loosen.
When market power starts looking like desperation
In February 2025, Zillow paid Rocket Companies' Redfin $100M to exit the apartment rental listings business entirely. Redfin agreed to shut down its rental advertising, hand its customers to Zillow and stay out of the market for up to nine years.
The FTC and five states challenged the deal, and a settlement reached just before trial requires Redfin to restart its standalone rentals business within six months. A government expert estimated Zillow customers paid 14.5% more per listing after Redfin pulled back.
The settlement will remain in place for 10 years. Redfin will continue showing Zillow’s listings through at least 2030, but it can once again compete for rental advertising.
Zillow ultimately spent $100M for roughly 18 months of reduced competition, with a decade of regulatory oversight now attached to the deal.
The listing war
While Zillow fights regulators over rentals, Compass is challenging its grip on home sales. Compass has expanded private listings, where homes are marketed within its agent network before reaching public platforms like Zillow.
Compass says sellers can test prices without making every cut public. Zillow argues that reduced exposure costs sellers, citing California Regional MLS research showing privately marketed homes sold for an average $27K below asking price.
There is a bigger risk for Zillow. Its value depends on having the listings buyers want to see. If more sellers keep homes private, even temporarily, Zillow has less inventory and becomes less useful to buyers. That can also make it less attractive to future sellers.
Most Compass private listings eventually go public, with 94% ultimately reaching the MLS and Zillow. But the delay can leave out information appraisers use, including days on market and earlier price cuts. The more activity that happens before a listing reaches the MLS, the less complete Zillow’s market data becomes.
One business, two existential bets
The underlying housing market isn't helping. New listings recently hit a four-month high while pending home sales fell to their lowest level in six months.
The housing market is making both problems harder to absorb. The median US home sells for more than $400K, mortgage rates are at 6.65%, and nearly four in 10 sellers are cutting prices.
Fewer transactions mean fewer opportunities for Zillow to turn listings and buyer interest into revenue.
Zillow is now dealing with pressure on both sides of its business. Regulators are reopening competition in rentals, while Compass is giving sellers another way to market homes outside Zillow’s reach.
Neither threatens the company on its own. But both weaken the advantage Zillow was built on: having the most complete view of the housing market.