Sezzle - FInTech Tracker - September 2023

Zillow Debuts Individual Room Listings as Housing Costs Climb

Zillow real estate site

Zillow has begun targeting customers who want to rent — or rent out — a room.

The real estate website announced Thursday (Feb. 8) that its platform now gives users the option to search for or list individual rooms for rent.

“This new listing type is particularly timely, as U.S. rents have surged nearly 30% since the pandemic, and a startling 50% of renters are now cost-burdened, spending 30% or more of their income on rent and utilities,” the company said in a news release. “Splitting costs with a roommate can help alleviate this financial burden.”

Consumer Price Index data released last month revealed that half of January’s rise in inflation stemmed from the cost of housing, with rents 6.5% higher than they were a year earlier.

According to the release, renters using Zillow can now include listings for rooms in their searches along with queries for entire dwellings, designed for people who might be searching for shared living spaces.

The company says this option benefits renters looking for roommates, a typical scenario among younger renters, who account for more than half of the U.S. rental market.

“We know finding the right place to call home isn’t one-size-fits-all,” Michael Sherman, vice president of Zillow Rentals, said in the release. “By introducing room listings, we’re crafting a robust marketplace of options that truly reflects the varied needs of renters. We’re committed to providing a platform where searching for a room, a house, an apartment or anything in between is as easy as clicking a button.”

The company says the new feature can also help homeowners by giving them a way to reduce mortgage expenses through listing available rooms.

“For landlords, this flexibility allows for more dynamic property management, offering single-room rentals as a quick vacancy solution,” Zillow added.

Last month, Zillow introduced a feature that allows renters to build their credit history at no cost to them or their landlord. Users can make on-time payments and have those payments reported to the credit bureau Experian.

“Every on-time rent payment is a testament to a renter’s reliability, yet it’s often overlooked in credit reports, and we want to change that,” Sherman said at the time.

Zillow says the program addresses a gap in credit reporting, as billions of dollars in rent payments are often unreported, meaning 26 million Americans are considered “credit invisible” with no credit history.