Do Zillow home loans cost more? What study reveals
By: Maddie McGay
NorthJersey.com
USA Today Network - New Jersey
..... A recent study suggests that borrowers who get their mortgage through Zillow Home Loans pay more than those who use other lenders.
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But critics are claiming its findings aren't reliable. The 40-page draft report, titled "Empricial Analysiis of Zillow Home Loans Pricing,: was published on December 21 [2025] by Georgetown University Law Center Professor of Economics and Law Emeritus Steven C. Salop.
..... Using loan origination data published by the Consumer Financial Protection Bureau via the Home Mortgage Disclosure Act - which requires most lenders to report information about their mortgage lending activity - the study compared Zillow Home Loans mortgages and those from other lenders that originated between 2022 and 2024.
..... It says that Zillow Home Loans buyers will pay "significantly higher mortgage costs than they would to other leaders" during the life of their loan, with Zillow borrowers paying from 0.10% to 0.15% more than other borrowers. This was equivalent to $3,213 more overall in 2023, and $4,579 more overall in 2024.
..... Zillow has not explicitly commented on how its loan products compare to other lenders, and whether they do result in higher costs for borrowers, but said the study's finings are "inaccurate and misleading."
..... "It was commissioned and paid for by a competitor and relies on selectively chosen data and inadequate controls to produce a distorted view of Zillow Home Loans," a spokesperson for Zillow said in a statement. "Zillow Home Loans is commuted to both fair lending and proconsumer practices. We have a robust fair lending compliance program and Zillow's fair lending data is validated by third party experts, who have also said this report is not credible. We stand by our business model and have a long track record of helping buyers of all types navigate the home buying process.
..... The study also says that overcharges varied among races and ethnic groups. For loans originated in 2024, the study said that Blake borrowers and Asian borrowers were subject to overcharges of $8,225 and $6,417 through Zillow, respectively, while White non-Hispanic borrowers were subject to overcharges of $4,943.
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Lower-income borrowers, as well as borrowers of VA and FHA loans, also faced various overcharges when using Zillow Home Loans, the study says.
No disparities found in analysis
..... Following its publication, the study initial findings have been questioned by experts at Charles River Associates, where the report's author is also a senior consultant.
..... "Independent analysis ... has consist entity found no disparities in average mortgage loan pricing base on borrower race or ethnicity for the years studied by Mr. Salon," Marsha Courchane, vice president and practice leader of financial economics at CRA, and D Avid Skanderson, a senior consultant and former vice president of CRA, said in a joint statement.
...... They said the analysis was preformed by CRA's fair lending experts as part of Zillow Home Loans; proactive fair leading compliance monitoring program, which is done by outside firms that check to see if Zillow's lending practices are fair.
..... They also said that publicly available date from the HMDA's as used in Salop's study, "lacks various key pricing factors" and that it should not be sued to "drew conclusions regarding fair lending disparities."
..... The study states the data for loan pricing factors includes loan interest rates, initiator fees, discount points, lender credits and the interest rate spread. things like debt-to-income ratios and loan-to-value ratios, among many other variables, were also accounted for according to the study.
..... "The public governmental database I used did not have the credit score, and the credit score is sued in pricing loans, so that is a legitimate question," Salop said. "However, the study included a number of variables that are correlated with the credit score."
..... He cited debt-to-income ratio of the borrower and the loan-to-value ratio of the loan, as well as the county of the property - because some neighborhoods have higher default rates. The study also includes age and income, "because people who are younger or who have lower income may be more likely to default," Salop said.
..... "As a result, it is not at all clear that the absence of the credit score will change the results. In fact, and as cited in the paper, there is prior academic research that showed that the absence of credit scores did not have a meaningful effect."
Who did the study, and why?
..... The study was funded by CoStar Group, which owns major real estate platforms like Homes.com and Apartments.com . CoStar Group is a competitor of Zillow, but it state that it had no influence over how the study was conducted or its findings.
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"The widespread media outrage over Zillow's alleged unethical tactics - coercing real estate agents to push buyers into overpriced Zillow Home Loans in violation of RESPA and fiduciary duties - compelled CoStar Group to commission a rigorous academic study by renown Georgetown economist and scholar, Steven C. Salop," according to a CoStar Group spokesperson. "CoStar Group exercised zero influence over the study's outcome and demands full peer review. Zillow's practices are indefensible."
..... As mentioned in the study, it comes on the heels of a federal judge approving a request to merge two class-action lawsuits against Zillow in early December. [2025] Both cases, Armstrong v. Zillow and Taylor v. Zillow, said the company has illegally steered home-buyers to use its own mortgage business, allegedly leading to higher cost for borrowers.
...... Zillow said the "claims in this consolidated lawsuit are false and fundamentally mis characterize how our business operates," and that it aims to empower consumers with information and choice.
..... The draft study is publicly available Online through Social Science Research Network, an open-access preprint server for early-stage academic research. The study is open to independent peer review. and Salop said he intends to submit it to a journal after further analysis on the topic."Zillow has its data. So, it could do its own study with additional data showing that its prices are either higher or not, or that its higher prices are justified by higher quality," Salop said.