CoStar, just under two years after launching what it described as the largest marketing campaign in real estate history to promote Homes.com, said yesterday that 2026 will see “meaningful moderation” in its investment in the portal, after some early stumbles sparked pushback from shareholders.
In a press release, CoStar Founder and CEO Andy Florance promised that Homes.com is still “an important part of our ecosystem” even as his company is now scaling back expectations—not projecting to make a profit from the business until 2030 as it plans to reduce net investment into Homes.com by roughly $300 million in 2026, and around $100 million annually after that through 2030.
“These updates follow robust engagement with stockholders over the last six months and implement the feedback we’ve received,” said Louise Sams, chair of CoStar’s board, in a statement. “The Board unanimously believes that CoStar Group is executing the right strategy to drive sustainable, profitable growth and is focused on holding management accountable to deliver on the Company’s objectives for the benefit of our stockholders.”
The announcement comes as the so-called “portal wars” grind on, with the last couple years seeing a shift in dynamics—even as the balance of power appears largely unchanged.
While Homes.com has been able to make some inroads since CoStar bought it in 2021, claiming around 100 million monthly visitors and over 26,000 subscribers to its service as of late last year, entrenched incumbents like Zillow and Realtor.com® have continued to invest in their lead selling-focused businesses. Redfin, a smaller player, was acquired by Rocket Companies and has laid low for much of 2025.
Early in 2025, an activist hedge fund investor pushed CoStar to rethink its investment in the Homes.com business, and CoStar subsequently launched a board “refresh” and a “Capital Allocation Committee” that led to these most recent changes.
There were other growing pains in the early days, with Florance facing questions on an earnings call in late 2024 based on lower than expected bookings for Homes.com, which he attributed to the major shift required in “pivoting” sales teams to sell the new product while the company hired new staff.
Despite the significant growth of Homes.com (CoStar claimed in the latest release that subscribers grew 337% from early 2024), the portal still appears far from its long-term goals, with CoStar previously saying it was looking for $2.5 billion to as high as $10 billion in annual revenue.
At the same time, the company authorized a $1.5 billion stock repurchase, and implemented some changes to its executive compensation. CoStar overall is still projecting an 18% increase in revenue growth year-over-year, and touted new investments in AI as part of its optimistic vision for this year.
“This positions CoStar Group to capture compelling near- and long-term growth,” Florance said. “Homes.com is an important part of our ecosystem; we now have a clear path to accelerate top-line growth and drive profitability.”
