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art 1 of a series on the risks of real‑estate search sites. Part 2 will arrive soon.
When you visit Zillow or Redfin, the promise is instant home buying: search listings, estimate values, and even buy or sell directly on the platform. Mortgage applications, once a weeks‑long paperwork slog, now appear as a few clicks beside a photo gallery. On the surface this looks like convenience, but industry experts warn that the efficiency masks a system engineered to funnel buyers into the companies’ own lenders, squeezing out competition and raising costs.
Zillow and Redfin’s owners are consolidating the trillion‑dollar mortgage market, a move that already inflates housing prices and could heighten financial risk. Regulators have accused the parent companies of illegally rewarding real‑estate agents for steering clients to their in‑house lenders—a “kickback scheme” called out by the Biden‑era consumer watchdog. President Trump halted regulatory crackdowns, allowing the firms to continue edging out smaller lenders and narrowing loan choices.
Many buyers are unaware that shopping for a mortgage can save them more than $80,000 over 30 years, and over $100,000 in states like California, Hawaii, and Washington. Using an in‑house lender often means higher fees and interest than alternative options.
The incentive to limit competition is clear: 80 % of U.S. home purchases are financed, 40 % of buyers start by shopping for a mortgage, and 80 % of those have no agent, per Zillow’s 2024 report. Zillow, once a home‑valuation site, has quietly shifted focus to mortgage sales, reporting an 80 % jump in new‑home lending last year. Rocket Mortgage, the country’s second‑largest lender, has entered Zillow’s search market by acquiring Redfin in July. Both giants are creating “mortgage traps” under the guise of one‑stop convenience, according to Gordon Miller, founder of Miller Lending.
The industry has long been fragmented, with buyers dealing with agents, insurers, appraisers, and lenders. Over time, Rocket and Zillow have positioned themselves to control every step. In 2018, Zillow bought Mortgage Lenders of America, rebranding it as Zillow Home Loans. By 2024, mortgage revenue rose 51 % to $145 million, and analysts say Zillow could become a top‑20 lender. Rocket Companies followed suit, acquiring Mr. Cooper, the largest mortgage servicer, and now manages $2.1 trillion in loans—about one in six mortgages. Three months later, Rocket bought Redfin, adding 1 million listings. CEO Varun Krishna said Redfin’s 50 million monthly users create new purchase opportunities in both directions.
Within weeks of the acquisition, nearly 200 000 Redfin users clicked “Get Prequalified,” directing them to Rocket Mortgage. Rocket projects $60 million in revenue by 2027 from pairing Redfin agents with its lender, advertising the slogan “Find it on Redfin, finance it with Rocket Mortgage.” To boost sales, the firms allegedly offer agents leads in exchange for steering buyers to their in‑house lenders. Miller reports that Zillow’s unwritten rule forces agents to use Zillow Home Loans or lose leads, and Rocket is expected to adopt a similar model. Critics say this coercion discourages comparison shopping and pushes higher‑cost options.
Rocket and Zillow have faced legal challenges. In 2015, the CFPB investigated Zillow’s co‑marketing program, alleging violations of the Real Estate Settlement Procedures Act (RESPA), which prohibits money or gifts for referrals. The Trump administration declined to pursue the case in 2018, but shareholder lawsuits led to a $15 million settlement in 2023. The CFPB later sued Rocket Homes for similar kickback practices, claiming the firm pressured agents to avoid alternative products like down‑payment assistance. The lawsuit was dropped in February after Trump curtailed CFPB operations. Democratic senators have urged the DOJ and FTC to scrutinize Rocket’s acquisitions for anticompetitive harm.
The lack of enforcement may embolden other conglomerates. Luca Dahlhausen, CEO of Realfinity, warned that success by Rocket and Zillow could push more firms to embed mortgage options or risk losing buyers. Miller Lending’s founder noted that the CFPB’s dismantling removed a safeguard designed to keep buyers from being steered by money.
In summary, the integration of search platforms and mortgage lending is reshaping the housing market. While the promise of one‑click buying is alluring, the consolidation of Zillow, Redfin, and Rocket Mortgage into a single ecosystem limits competition, raises costs, and reduces consumer choice. The upcoming part of this series will examine the broader implications for buyers and regulators.
