Z
illow’s 2025 was a roller‑coaster: revenue topped forecasts and its mortgage and rental arms surged, yet the company faced a barrage of lawsuits, new rivals, and policy backlash that threatened its dominance.
**Competitive surprises**
Rocket Companies, the nation’s largest lender, bought Redfin in March, promising a “fully connected, end‑to‑end” experience that could rival Zillow’s breadth. Industry insiders warned that a combined Rocket‑Redfin entity might seriously challenge Zillow’s market share. In December, Google launched a limited real‑estate test, showing listings and a “Request a tour” button in search results, signaling a potential new entrant that could erode Zillow’s lead. Though analysts doubt an immediate shake‑up, a Goldman Sachs analyst cautioned that Google’s move could pose a long‑term threat to portals like Zillow.
**Listing‑standard backlash**
Zillow’s April rule banning listings that were marketed publicly but not widely available through MLS and IDX feeds drew praise from some brokerages but drew fire from others. CoStar CEO Andy Florance called the policy a “money grab” and questioned its legality, labeling Zillow and its allies an “anticompetitive cartel.” Howard Hanna’s CEO Hoby Hanna accused Zillow of overstepping and restricting trade. Compass CEO Robert Reffkin branded the ban as “bully behavior” and “abuse of monopoly power,” filing an antitrust complaint in June. The lawsuit also cited a rentals partnership with Redfin that mirrored Zillow’s rules, alleging a conspiracy that harmed Compass’s reputation and marketing program. A judge has yet to decide on a preliminary injunction to halt Zillow’s enforcement of the new standards.
**FTC and state scrutiny**
The alleged conspiratorial rentals partnership drew the FTC’s attention. In September, the agency sued Zillow and Redfin, claiming the deal eliminated critical competition in rental advertising. Five states joined the suit the next day. The FTC and state cases merged on December 1 and await further action; a win for the FTC could force the portals to divest assets or restructure.
**Intellectual‑property fight**
CoStar sued Zillow in July over alleged unauthorized use of more than 46,000 CoStar photos, seeking up to $1 billion in damages. After Zillow removed some images in September, CoStar alleged new copyrighted photos were still displayed. The case moved to Seattle in December, with CoStar poised to hold Zillow accountable locally.
**Buyer‑referral lawsuits**
Zillow’s Flex agent referral program and alleged steering practices sparked two lawsuits. The first, filed in the fall, accused Zillow of “tricking” buyers into using its agent advertisers, then taking undisclosed referral fees that inflated commissions. An amended complaint added racketeering claims and alleged RESPA violations by pushing buyers toward Zillow Home Loans. A second lawsuit, filed in November, alleged a kickback system linking Zillow Home Loans referrals to leads. The cases consolidated in December and await new motions. Zillow denies the allegations, but a plaintiff victory could deal a severe blow.
**Risk‑mitigation moves**
In October, Zillow dropped Matterport 3D tours from listings, citing new usage restrictions from CoStar’s parent, Matterport. CoStar denied imposing new limits, calling the removal a unilateral decision that harmed customers. In December, Zillow removed climate‑risk estimates from listings after complaints from the California Regional MLS about data accuracy. The MLS said it had not changed rules, only expressed concerns about flood data for certain properties. Redfin and Realtor.com continue to display the five risk factors.
**Looking ahead**
With mounting competition and litigation, 2026 could be a decisive year for Zillow. The company’s ability to navigate regulatory challenges, fend off new entrants, and address legal claims will determine whether it can maintain its real‑estate portal dominance.
