Zillow Group (NASDAQ:Z | Z Price Prediction) is trading higher in Friday morning action, with Z stock up approximately 5% as of Friday. The catalyst is a strong macro print: housing starts surged 7.2% to an annualized rate of 1.49 million units in January, the highest reading in the past year and sitting in the 90th percentile of the historical range.
The move puts Zillow stock well ahead of both the broader market and its own sector. For a stock that has been under significant pressure, today’s bounce is a welcome reprieve for investors who have been watching the shares slide.
Housing Starts Jolt Optimism for Zillow
More housing starts means more listings, more transactions, and more demand for everything Zillow Group sells. The company’s entire business model, from Premier Agent advertising to its Rentals platform to Zillow Home Loans, runs on housing activity. When builders break ground at a faster pace, the pipeline of future inventory expands, and platforms that sit at the center of the home search process stand to benefit directly.
January’s reading of 1.49 million annualized units compares to a low of 1.27 million in October 2025, representing a meaningful recovery in builder activity over the past few months. The data reinforces a theme we have been watching: construction momentum may be building even as affordability remains stretched. If you are looking for more context on which companies could benefit most from this kind of housing tailwind, we outlined three construction stocks positioned for a big year in 2026.
Context: A Stock Badly in Need of Good News
Today’s move comes after a brutal stretch for Zillow’s shareholders. The stock is down 36% over the past year. Even after today’s bounce, shares sit well below the 52-week high of $93.88.
The selling pressure intensified after Zillow Group’s Q4 2025 earnings report on February 10, even though the results were solid. Revenue came in at $654 million, up 18% year over year, beating the consensus estimate of $650.5 million. The company also crossed a major milestone: full-year 2025 net income of $23 million, its first GAAP-profitable year, compared to a $112 million loss in 2024.
What spooked investors was the forward guidance. Zillow Group guided Q1 2026 revenue to $575 to $590 million and flagged that challenging housing market conditions are expected to continue. The company also cited elevated legal expenses creating roughly a 200 basis point headwind to Q1 adjusted EBITDA margin. That combination sent Zillow stock lower even as the company’s underlying business showed real progress.
The Business Underneath the Noise
Strip away the macro headwinds and Zillow Group’s growth engines are genuinely impressive. The Rentals segment generated $168 million in Q4, up 45% year over year, with multifamily revenue up 63%. Multifamily property count reached 72,000 at year-end, up 44% from the start of 2025.
In addition, Zillow’s Mortgages revenue grew 39% in Q4, with purchase loan origination volume hitting $1.5 billion, up 67% year over year. Average monthly unique users across Zillow Group’s apps and sites reached 221 million in Q4, up 8% year over year. CEO Jeremy Wacksman framed the company’s position this way on the earnings call:
“We delivered strong results in the fourth quarter and throughout 2025, achieving all our reported full-year financial targets, including positive net income, while continuing to gain share in both For Sale and Rentals.”
Wacksman also pointed to two decades of AI innovation and industry-leading software as differentiators that he believes position Zillow Group to drive durable growth. The analyst consensus price target sits at $74.67, implying meaningful upside from current levels if the housing market finds its footing.
One Number Worth Watching
The 10-year Treasury yield currently sits at 4.21%, up from a recent low of 3.97% on February 27. That matters because rising yields push mortgage rates higher, which works directly against housing affordability.
Today’s housing starts surge is encouraging. Yet, if the 10-year yield keeps climbing, it could dampen the very demand Zillow Group needs to accelerate its For Sale business.
Zillow Group is a company that has done the hard work: first-time GAAP profitability, a rentals platform growing at 45% annually, and a mortgage business that nearly doubled origination volume year over year. The missing ingredient has been a housing market willing to cooperate. Today’s data suggests that ingredient may finally be showing up; whether it sticks is what Zillow stock investors should look for through the spring selling season.
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