Zillow-Scrolling Takes a Hit as Millennials Wait Out Mortgage Rates

The walls are closing in on Zillow, whose shares fell last week as millennials stopped even allowing themselves to dream about that ranch-style three-bedroom they bookmarked at 2 a.m. Monthly users on Zillow’s home-scrolling apps and sites dipped 3% (and visits fell 5%) amid what CEO Jeremy Wacksman called “one of the toughest housing markets in a generation.” 

Zillow’s revenue overall climbed 7%, mainly driven by its rentals business, which rose 26%. Revenue from real estate agents helping people buy and sell homes, the biggest piece of its business, slid 4%.

The problem: a housing freeze that’s left a generation of would-be homebuyers resigned to renting.

Starter Home? Forever Home

Mortgage rates were higher than Zillow expected, which meant fewer home sales as sellers stayed locked in golden handcuffs and buyers avoided being shackled to big monthly bills. The average 30-year fixed rate in September topped 7% for the first time since January 2025, according to Freddie Mac. Then the pitch got steeper than an A-frame roof: Rates peaked at 7.4% in mid-October and were still hovering around 7.2% this week.

That’s meant fewer “For Sale” signs on lawns across the US:

• Realtors kissed their commissions goodbye, as pending home sales, or signed contracts on existing homes, fell 7.3% in September from the month before. The telltale sign of housing activity was down more than 11% from a year earlier, per the National Association of Realtors. 
• Goldman Sachs expects downward pressure from mortgage rates to keep stifling housing activity into next year. More than 95% of mortgage holders had locked in interest rates lower than the market rate (at the time of the report that was about 7.3%) and nearly two-thirds had rates a full two percentage points lower. Goldman expects home sales to slip further next year.

Silver-Hair Lining: Elder millennials (the ones who grew up with Pogs more so than Pokémon) are trying to buy homes. Key word: trying. The median age of first-time homebuyers has been sitting at a record high of 40 for the last two years. Of first-time homebuyers, one in 10 padded their down payments with inheritance and a quarter with personal gifts or loans. A record 10% skipped the mortgage altogether, fronting all-cash for their house in the year through June, and more than a quarter of them used inheritance. Basically, people are getting creative to buy a house — they aren’t above calling in a favor or using the windfall from a will — signaling pent-up demand for the picket-fenced life.