Zillow Home Loans purchase volume was up 125% year-over-year in the second quarter, as it looks to
Total originations in the second quarter were $759 million, all but $3 million of which was for consumers buying a home. This compared with $340 million during the second quarter of 2023, with just $4 million of refinance production.
That gain contrasts with the
Mortgage unit revenue, which includes Zillow's marketplace business, was $34 million, up from $24 million one year prior. It was helped by a 23% increase in gain on sale revenue.
"These successes come despite a persistently challenging mortgage rate environment as evidenced by our estimate of total industry purchase loan origination volume being down mid-single digits year-over-year in Q2," Jeremy Wacksman, who was announced as the company's new CEO on Aug. 7, the day of the earnings release, said during the conference call.
"We expect continued purchase mortgage growth for Zillow Home Loans as we launch more enhanced markets and continue to improve our go-to-market integration with our Premier Agent partners," Wacksman said.
The positives from the mortgage origination activity was partially offset by lower marketplace revenue. The company is now putting its eggs in the mortgage loan bucket.
"So you see the mortgage category start to more accurately map to the Zillow Home Loans growth," Jeremy Hoffman, chief financial officer, said in response to an analyst's question. "That's not to say the marketplace isn't important, too. It's just secondary."
If anything, having the marketplace helps during the times Zillow Home Loans can't service the consumer. "We feel quite good about both of those businesses, but the vast majority of the focus going forward is going to be in Zillow Home Loans," Hoffman continued.
Zillow Group entered mortgage originations in
In November 2021, when it closed Zillow Offers, then-CFO Allen Parker commented that it would have
In the second quarter, Zillow Group had a net loss of $17 million, down from $35 million in the prior year.
