Data: Financial Modeling Prep; Chart: Axios Visuals
Rocket Cos. agreed Monday to take real estate marketplace Redfin private for $1.75 billion.
Why it matters: Redfin has been hurt by the stagnant housing market, with existing home sales at their lowest level since 1995.
By the numbers: Redfin shares stand nearly 91% below their 2021 peak. Its revenue grew 6.7% (to about $1 billion) in 2024 compared with the year prior, while net losses grew 30%, to $164.8 million.
The big picture: Rising home prices and relatively high interest rates have kept buyers from the market.
- Zillow has been the rare player to sidestep some of the impact, building on success in the rental market and growth in its mortgage product.
- Zillow’s overall revenue grew 15% last year (to $2.2 billion), driven by 27% growth in rentals revenue (to $453 million) and 51% growth in mortgages revenue (to $145 million). It was also able to narrow losses by 29% (to $112 million) last year.
- Earlier this year, Redfin announced plans to lay off 450 employees in its rentals division after inking a partnership for Zillow to provide multifamily rental listings on its sites.
Shares of Redfin shot up this morning by 76% on news of the deal.
The bottom line: Redfin and Rocket Cos. are betting they can win more market share by combining mortgages and brokerage services into one platform.
