7.13.26 Rates on the Up; Zillow Home Loans' Eric Wilson on Borrower Journey; Economic Calendar

Today’s episode includes a discussion on why mortgage rates have gone up recently. Plus, Robbie interviews Zillow Home Loans’ Eric Wilson on how the company is guiding buyers with care and confidence, helping them move from pre-approval through closing with support from centralized processing, underwriting, and closing teams. And we close with a look ahead at this week's economic calendar.

Thanks to Zillow Home Loans, Zillow’s in-house mortgage lender, for sponsoring this week’s podcasts. By integrating Zillow’s real estate platform with financing, Zillow Home Loans helps buyers move from dreaming about a home to holding the keys. With tools built for modern lending, Zillow Home Loan’s loan officers can focus on guiding buyers with care and confidence. Zillow Home Loans is an equal housing lender. NMLS #10287.

The Chrisman Commentary is your go-to daily mortgage news podcast, where industry insights meet expert analysis. Hosted by Robbie Chrisman, this podcast delivers the latest updates on mortgage rates, capital markets, and the forces shaping the housing finance landscape. Whether you're a seasoned professional or just looking to stay informed, you'll get clear, concise breakdowns of market trends and economic shifts that impact the mortgage world.

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Speaker 0:02

Welcome to the Chrisman Commentary, Daily Mortgage News Podcast. I'm your host, Robbie Chrisman. Topics on today's episode include why have mortgage rates gone up, what to look forward to on this week's economic calendar, and my interview with Zillow Home Loans, Eric Wilson, on how the company is guiding buyers with care and confidence, helping them move from pre-approval through closing with support from centralized processing, underwriting, and closing teams. Here, take a listen, do a little preview. Everybody knows Zillow, but there's also ZHL. And I'm hoping you could you can explain the interplay between the two and how they work together.

Speaker 1 0:36

Yeah, totally. So obviously, we think about Zillow, and from the consumer and the agent perspective, the core of our business is, of course, at Zillow introducing home buyers to our preferred agent network. That's certainly one of the core uh aspects of the Zillow model overall. And ZHL, you know, the genesis of mortgage finance within Zillow actually is as a leads marketplace. So we we have today still a leads marketplace that was at one time 100% of the consumer offering that we had as far as mortgage financing goes, it was an opportunity for consumers to be introduced to one of a large number of lenders that are part of a marketplace that offer a pretty wide array of mortgage products. And over time, as we've started to engage in direct lending, ZHL, we have progressively started to consume, I'll use the word consume more and more of the interested customer leads to engage with them directly. And so that has meant that we've started by offering a fairly vanilla offering of loans and loan products. And then we've expanded that product offering over time so that the vast majority of actually what we do today as a mortgage company is on a direct basis. So we're a direct lender. That's our primary business model. But we do think that consumer choice is really valuable. There are probably products that we won't, you know, we'll probably never offer 100% of the loan products that are available out there in the market. And we think that it's important that as a lender within the Zillow ecosystem, we're creating a path for 100% of customers that can get financing somewhere to be able to find their lender in that financing and loan product through uh ZHL, whether that's us or the marketplace. So it'll continue to be a pretty critical part of the business, but it's a smaller portion of what we do today.

Speaker 2:24

Thanks to Zillow Home Loans, Zillow's in-house mortgage lender for sponsoring this week's podcasts. By integrating Zillow's real estate platform with financing, Zillow Home Loans helps buyers move from dreaming about a home to holding the keys. With tools built for modern lending, Zillow Home Loans loan officers can focus on guiding buyers with care and confidence. Zillow Home Loans is an equal housing lender, NMLS number 10287. Rates moved higher last week as investors absorbed another round of geopolitical stress and the inflation imperative that comes with it. Another breakdown in the U.S.-Iran ceasefire, alonged with renewed hostilities around the Strait of Hormuz, pushed crude materially upward and kept the Treasury complex on the defensive. Oil finished the week nearly 7% more expensive, helping lift the 10-year treasury yield by seven basis points and leaving the 2's 10's curve slightly steeper. This was not the kind of geopolitical tape bomb event where treasuries caught a safe haven bid. Energy prices were the bigger story, and investors treated higher oil as a tax on duration rather than a reason to hide in it. Yet, mortgage-backed securities in U.S. Treasuries ended Friday on firmer footing after a week of heavy selling and volatility, with shorter-term yields rising to near 2026 highs despite light news, no economic data, and falling oil prices, while longer-term yields increased more modestly and remained over 10 basis points below their yearly peaks. Treasuries entered this week, helped by oversold technical conditions. There's a view that last week's rising yields may have overshot the underlying fundamentals, stable oil prices, and easing concerns that renewed Middle East hostilities will generate a sustained inflation shock. Strong demand across last week's Treasury auctions was proof of investor appetite for duration, like mortgage-backed securities, suggesting more comfort with current yield levels. The June Federal Open Market Committee minutes also tempered expectations for near-term policy tightening, indicating that while officials remain concerned about inflation from energy, tariffs, and AI-related investment, any additional rate hikes would require clear evidence that those pressures are becoming broader and more persistent. The markets continue to view a rate hike this month as unlikely, leaving the Fed in a position to monitor incoming data rather than rushing into further tightening. Investors also took comfort in the minute's continued level of detail, signaling that although Chair Warsh has reduced forward guidance in official statements, the Fed remains committed to providing transparency around its policy decisions. For today's interview, I wanted to welcome to the show Zillow Home Loans Eric Wilson to talk about how the company is guiding buyers with care and confidence, helping them move from pre-approval through closing with support from centralized processing, underwriting, and closing teams. Very excited to be speaking with you today. Obviously, in this new age, data has become of even more of the utmost importance when it comes to artificial intelligence being able to do very industrious things with good data in, good data out. Zillow sees tens of millions of buyers months before any lender doesn't. So this is very exciting to talk about that side of things. What does the buyer intent data tell you that traditional lenders don't have access to?

Speaker 1 5:42

ZHL, being a part of Zillow, provides us with a couple of what I'll refer to as distinct advantages. The first is the opportunity to start to build a relationship with consumers at the very start of their journey. If you juxtapose that with the vast majority of lenders, that will, in the purchase phase, since we we focus so heavily on purchase, they will meet the customer, you know, at the time that a real estate agent makes a referral. It will often mean that they are coming in mid-conversation, so to speak, and they're trying to do two things. They're trying to catch up as well as educate and inform, because there's affordability plays such a big role in both how the consumer will shop and ultimately how successful they can be when they work with an agent. You know, we view the opportunity to build a relationship earlier in the journey as one of the key points of differentiation for us and one of the key kind of consumer values. So for us, the way we talk about it is the relationship really starts at the search bar when we think about the consumer. And we've got a couple of different, you know, ways that we look to enrich the customer journey, certainly the early part of shopping. Viability being chief among those, it's uh, you know, what we refer to as a very lightweight way for a consumer to start to get a sense for their affordability. They don't have to schedule time with an LO, they don't have to meet with anyone, right? It's a couple of minutes, they can answer a few questions, and it's a way for them to start to get a sense for their affordability, and they can actually take that with them and shop so they can begin to filter homes by that. If they want to go deeper down that journey, there's education around that as well. And we view it as a way to become an on-ramp to a relationship with an LO, if that's where you choose to start the journey. But we think that ultimately, at the end of the day, it creates better informed home buyers and shoppers. And that means if you choose to start with your journey with an agent, you're going to be that much better prepared. And hopefully that agent will bring you back for an introduction to a ZHL LO and we we can all take that conversation forward together. So that's probably one of the core differentiating factors there for both the consumer, but also for us as ZHL.

Speaker 7:39

You're launching a feature that connects pre-approval directly to the home search experience. And I'm wondering what changes for a loan officer when a buyer arrives already tied to their purchasing power.

Speaker 1 7:51

It's interesting, but it's it's really, you know, we talked about what I'll refer to as maybe that that first core differentiating factor and the ability to build that relationship early in the journey as a lender. And viability is a great tool for the customer and for us as a lender. And then you you kind of pull that thread and you look at shop with pre-approval. So people will often ask me, someone that's coming up on almost 20 years in the in the mortgage space, why Zillow Home Loans? What's the core differentiating factor of for Zillow Home Loans? And the first thing I actually go to is we are the only lender that is able to persist throughout the entirety of the journey as a support to the consumer. And shop with pre-approval, which we launched at the beginning of this year, is the thing that I've been the most excited about. So it's the ability to start with viability, this lightweight way to understand your affordability, move deeper into the journey as you're shopping, and obtain a pre-approval online with ZHL, and then actually take that pre-approval with you as you shop. So you can now filter homes by that. We pair that with the richest set of data available in terms of properties, so that we can dial in a very precise total cost of ownership. And it allows us to start to move the way you shop for a home more towards shopping by monthly payment, as opposed to shopping for a purchase price. And we think that that's a more natural way for a customer to shop. But in order to do that, you have to be able to provide a very accurate pre-approval. And then a consumer has to be able to have that kind of at their fingertips as they go throughout the journey of searching for a home. And so we make that possible with shop with pre-approval. And what's really cool about that is there's obviously the cool factor from the customer side or the consumer side. And we love that obviously from a lending and an LO side because now our LO is kind of persisting throughout that journey. They're one click away, but one click to call us on the phone or to get an answer. But it also allows us to start to take the signal from the shopping experience and the affordability signal that we get based on how customers actually use these tools. And we can provide that data back to their agent as well. And so it becomes this really great way to keep the agent and the LO up to date and aware of where the customers' preferences lie at any point along the journey, what their affordability looks like, so that we can support them or we can be there just in time. And that's that's what I think is pretty cool about shop with pre-approval. And I think it is, again, it's reflective of what I think ultimately is one of our key, is now our core differentiator.

Speaker 10:24

Yeah, you have an inherently huge competitive advantage by having all these people already on Zillow. And then being able to show them real-time purchasing power is just a fantastic feature, and I think will lead to great success. And it has. Zillow Home Loans posted a 96% year-over-year increase in purchase originations in the first quarter. Big congratulations there. But I want to ask you, in a market where most lenders are competing for the same shrinking volume, what's actually been driving that growth?

Speaker 1 10:53

Yeah, it's been a great run here. Obviously, yeah, posting that year over year, almost doubling of the business we're really excited about. That's a growth story that has started, that started, you know, way before just 12 months ago. I'd say really the last 18, if not almost 24 months, we within ZHL started to make a really concerted push towards what we refer to as the integrated transaction and the integrated transaction set of experiences. Effectively, how do we bring mortgage or home financing into the mixture with Zillow and pair that with what we already do really well? We have really an unmatched agent network that we can connect buyers with. And now we've got the mortgage side of the equation. And so we've been investing in in-app experiences and integration between our loan origination system and CRM on the CHL side and follow-up boss, which is one of the largest real estate CRMs out there, and then tying that all back to the Zillow app so that consumers have the ability to take both of the experts in the transaction, ultimately the two experts that they're going to rely on most with them as they shop on the app or anywhere while they're on the go. And that starts at the point of viability and it goes all the way through the point of closing. So uh to say it clearly, you know, or succinctly, 100% of that growth has come from uh that investment in the integrated transaction. It's it's come from growth in transaction volume where we're pairing the preferred agent with a CHL LO.

Speaker 12:19

And you mentioned earlier this kind of putting people in the right products, and that's been a huge trend in the mortgage industry. How do we create a broader product landscape to suit the needs of the modern borrower? And obviously, no company wants to say, hey, I don't offer this product, but my competitor doesn't. And obviously Zillow is expanding their product set. You are, though, sending mortgage leads to other lenders through your marketplace. And I'm wondering as Zillow Home Loan Scales, how you think about the relationship between your own origination growth and the broader lender ecosystem on the platform?

Speaker 1 12:50

Yeah, it's a great question. And I would kind of go back to the mortgage leads marketplace, is really the genesis of our foray at Zillow into home financing. And it plays an important part as a way for us to promote consumer choice. You know, at the end of the day, everything we do here within ZHL as part of Zillow is really about delivering the best possible consumer experience we can to help as many would-be home buyers find their way home. That's what we're trying to do. And by promoting access to a different set of lenders than just ZHL or a different set of loan products than just what ZHL chooses or is able to provide, uh, we think is a way to help us in that mission, right? Ultimately find, help more folks find their way home. So, yeah, we've got the marketplace. It's actually a smaller part of our business today than it certainly was 12 or 18 months ago. Um, but we see it as something that will, you know, stay around in perpetuity so that when we don't have the right product for a shopper, we know someone that does, and we can ultimately help them get connected.

Speaker 13:55

You also earlier in the interview, you talked about how a lot of the focus has shifted from rate to payment, and and people can see their purchasing power and payment in real time, which is very valuable. It's all part of this modernized home buying experience, search, finance, closing, all in one connected flow. What does the industry actually need to do to get there? And what do you feel like is Zillow Home Loan's role in that?

Speaker 1 14:19

Obviously, we've talked a lot about the integrated transaction experience, shopping with your purchasing power, right? A lot of these like tech-enabled tools that are part of this ongoing trend, right, of trying to modernize home buying. I think if we take a step back from the tech, probably the first thing that I would say is on the regulatory side, RESPA modernization is one of the key things that we look at. RESPA is 50 years old now. The rules were written before a lot of the tech and tools and these modern experiences were available. You know, look, I would want to be clear like we believe in consumer protections. We don't want to weaken the protections. Um, but right now we're operating in an industry where there's a lot of regulatory gray area. And I think ultimately the lack of clarity is born first and foremost by the consumer. When you create uncertainties for key players in the transaction, whether you're the lender, whether you're the title company, whether you're the real estate agent, that lack of clarity prevents us from doing everything that we can to deliver a better experience and a more cohesive customer journey. So I think first and foremost, we're really big in terms of how we think about REST and modernization and trying to help the industry make good decisions as we go forward. And then if we go back to the tech component, AI obviously is going to play a big part. It's already starting to be to play a big part in modernization at Zillow. You know, we now have an AI-led journey that's available to consumers. You can come in, you can start to chat with AI in the same way that you might go to do that with ChatGPT or any of the other tools. And we think that's really cool. It's a new way for consumers to start to guide and navigate uh that home buying journey where they can really be in a lot more control than like any one kind of standard UI can ever be. It offers a lot more personalization, and that's great. I think from the lending side in particular, the way we think about it at ZHL is that it's a near-term eventuality that end-to-end automation of a mortgage loan will be possible. Certainly the vast majority of loans, I think, will be able to be originated 100% via AI and other automation tools. And what that means, I think, for the consumer is like, hey, there's a sterning. Maybe things can be done faster. More importantly, what it means is LOs, real estate agents, even settlement agents have more time and bandwidth to invest in personalization, to invest in judgment, to invest in helping to guide the consumer and building relationships. And that's really what, you know, I think humans are best equipped to do to the extent we're all involved in this transaction. And we think that there's going to be no substitute for those two players in the transaction. And so we're looking at ways that we can leverage AI to really elevate and really bring, at least within ZHL, our loan officers, more into the forefront so that they're spending the vast majority of their time actually engaging, guiding, building relationships with customers as opposed to pushing paper and bearing a lot of the administrative burden that goes home in the background. So we're really excited about the evolution in tech there that makes it possible. But it's probably a combination of both uh the regulatory framework that's around us and then continued investment in tools, and ultimately for us delivering that nirvana state of that totally integrated transaction.

Speaker 17:36

This to me feels almost like when Apple launched the iPhone. It made so much sense for so many years and it came to the market, and every it was so well adopted. Zillow launching Zillow home loans makes complete sense. And obviously, I think that y'all are incredibly well positioned to make a huge mark on the housing industry. Eric, really appreciate the time, man. Ton of valuable insights. Love love hearing it straight from the horse's mouth. So thank you very much, sir.

Speaker 1 18:02

Robbie, it was great. Thanks for having me.

Speaker 18:07

Today has zip zero for scheduled economic news, but tomorrow has the June Consumer Price Index report and Fed Chair Warsh's semi-annual congressional testimony, both of which should help shape expectations for the remainder of the year. A benign CPI inflation reading, expectations are for a 0.2% decline in the headline number following a significant decline in the price of energy goods, would reinforce the view that recent energy volatility has yet to meaningfully spill into broader prices. Warch is likely to maintain his emphasis on price stability without offering explicit guidance on future rate decisions. With little scheduled economic data and summer trading volumes remaining light, Treasury performance is likely to be driven more by technical factors, oil prices, and any new geopolitical headlines than by changes in the underlying economic outlook. This week's economic calendar has the CPI and June PPI. Other scheduled releases include data, small business optimism, regional manufacturing surveys, jobless claims, housing data, industrial production, consumer sentiment, and the Fed's beige book. Throw in some short-duration treasury auctions and remarks from Fed members, Bowman and Waller, and that's it. We begin the week with agency MBS prices slightly worse than Friday's close, the two-year yielding 4.22, and the 10-year yielding 4.58 after closing last week at 4.57%, a baby ACE's points over the course of the week. Let's wrap up with a joke and some housekeeping. A Mexican magician was doing a magic trick at a kid's birthday. He said he'll disappear at the count of three. Uno, Dose, and poof, he was gone without a trace. Thanks again to Zillow Home Loans, Zillow's in-house mortgage lender, for sponsoring this week's podcast. By integrating Zillow's real estate platform with financing, Zillow Home Loans helps buyers move from dreaming about a home to holding the keys. With tools built for modern lending, Zillow Home Loans loan officers can focus on guiding buyers with care and confidence. To learn more, visit Zillow.com/slash home loans.