CoStar to reduce investment in Homes.com by more than a third 

After pouring hundreds of millions of dollars into Homes.com to fuel a full-scale portal challenge to Zillow, Redfin and Realtor.com, CoStar now says it will reduce that investment by 35% in 2026 — and continue stepping it down by $100 million-plus annually through the end of the decade.

The details of the pullback were revealed in an 8-K form filed by CoStar Wednesday with the Securities and Exchange Commission. 

The update from CoStar doesn't signal an end to the portal wars, but suggests the company's spending blitz may be winding down as the company focuses on long-term profitability. By reducing its investment in Homes.com, CoStar expects to achieve positive adjusted EBITDA in 2030 and "revenue in excess of expenses exiting 2029," according to the filing.

The end of the spending spree?

CoStar made a splash in early 2024 when it announced plans for a $1 billion advertising push for Homes.com, which the company described as "the biggest marketing campaign in real estate history." The company ran ads during the Super Bowl and other major sporting events in an effort to reach 90% of American households, the company said at the time. 

The marketing push came on the heels of another ambitious Homes.com initiative to build "a Google for life in the United States," according to CoStar CEO Andy Florance. In May 2023, Florance touted CoStar's plan to invest "hundreds of millions of dollars" in developing original content for Homes.com, telling Real Estate News that it would result in "the most robust documenting and storytelling about all the communities — like 20,000 communities — in the United States."

Tightening the purse strings

The latest SEC filing suggests a shift in strategy, however. 

While CoStar calls Homes.com "an important competent of our residential portfolio," it now expects to reduce its "net investment" — the difference between the revenue Homes.com generates and the costs of operating and marketing the portal — by more than $300 million in 2026, down from $850 million in 2025, according to a news release included with the filing.

The filing also offers investors a financial roadmap to profitability, but it doesn't specify which Homes.com teams, departments or initiatives may be impacted or reduced. It notes, however, that CoStar "has already achieved outstanding efficiencies through AI deployment" in areas spanning content creation, research, coding and data extraction. 

As recently as October 2025, Florance highlighted the growth in new bookings with Homes.com, attributing that success to the portal's expanded sales team — a team, he told investors at the time, that would continue to grow.

A focus on profitability, shareholder returns 

The announced pullback in spending follows earlier scrutiny from CoStar investors concerned that the company's investment in Homes.com was failing to deliver sufficient returns. Those pressures led CoStar to reshape its board in April 2025, a governance change intended to sharpen CoStar's focus on execution and accountability and "ensure an appropriate timeline" for Homes.com's profitability. 

Louise Sams, the company's independent board chair, said the actions announced in the latest filing "follow robust engagement with stockholders over the last six months and implement the feedback we've received" after "a thorough, independent review" by the board's Capital Allocation Committee.

At the same time, CoStar is signaling its intention to return more cash to shareholders. The company announced a new $1.5 billion share repurchase authorization after completing a $500 million buyback program last year — reinforcing the view that capital discipline is becoming a more central theme even as CoStar continues investing in Homes.com.

And while the board has made changes and CoStar has continued to promote Homes.com's progress on its product rollouts and revenue growth, the company has not appointed a new president at Homes.com — a role that has remained vacant since former president Dave Mele departed in May 2024. 

In a business where portal dominance is often purchased through sustained spending, CoStar's decision to cut its investment in Homes.com may be less about stopping the fight and more about changing the terms. 

CoStar did not immediately respond to a request for comment.