--- title: Why did Zillow pause its home-buying program? - The Hustle description: Zillow is pausing its iBuying program as home sales slow and a shortage of construction workers hamper its operation. image: https://hs-sbup.thehustle.co/hubfs/The%20Hustle%20News/Assets/Images/786967070-News-Brief_2021-10-20T010816.678Z.webp --- # Why did Zillow pause its home-buying program? ![Trung T. Phan](https://thehustle.co/wp-content/uploads/2020/04/Image-from-iOS-300x300.jpg?width=48&height=48&name=Image-from-iOS-300x300.jpg) [Trung T. Phan](https://hs-sbup.thehustle.co/author/trung-t-phan) [Trung T. Phan Twitter profile ](https://twitter.com/TrungTPhan) Published: October 20, 2021 Updated: October 11, 2023 Zillow is seared into our brains as the go-to website for finding home prices (and snooping on the value of our friends’ real estate portfolios). ![Why did Zillow pause its home-buying program?](https://hs-sbup.thehustle.co/hs-fs/hubfs/The%20Hustle%20News/Assets/Images/786967070-News-Brief_2021-10-20T010816.678Z.webp?width=595&height=400&name=786967070-News-Brief_2021-10-20T010816.678Z.webp) In 2018, the $22B technology firm launched a completely new business line: [Zillow Offers](https://www.geekwire.com/2019/rapidly-growing-zillow-offers-direct-home-sales-program-opens-15th-market-come/), a home buying and selling platform (AKA iBuying). It saw strong growth for years, accounting for more than half of its [$3.3B](https://www.google.com/search?q=zillow+2020+revenue&oq=zillow+2020+revenue&aqs=chrome..69i57j35i39l2j69i59l2j69i60l3.1884j0j7&sourceid=chrome&ie=UTF-8) of revenue in 2020. #### **Zillow is now pausing the home-buying program** Why? Per [*The Wall Street Journal*](https://www.wsj.com/articles/zillow-says-it-cant-buy-any-more-homes-this-year-11634574144), the company is being hit on both the demand and supply side: - **Home sales are slowing**, which hampers Zillow’s ability to collect flipping fees (ranging from [9.5%-22%](https://www.realestatewitch.com/zillow-instant-offers/) of home sale price) - **A shortage of construction workers **prevents Zillow from renovating the homes it purchases One analyst tells *WSJ *that Zillow may have over-purchased homes. #### **Zillow Offers is very cash intensive…** … because the company has to put the homes on its balance sheet. Even with the pause, Zillow has 3k+ homes (valued at ~$1.2B) to unload. The change comes a few weeks after Zillow came under fire over a viral TikTok video accusing it of buying up blocks of homes and [manipulating](https://ca.finance.yahoo.com/news/zillow-tiktok-video-real-estate-housing-211403123.html) home prices. To add insult to injury, its main competitor — Opendoor — says its iBuying business is trucking along with 8.2k new home purchases expected in Q3 2021. As long as nothing happens to the “[Zillow Gone Wild](https://www.instagram.com/zillowgonewild/?hl=en)” Instagram account, we’re cool. 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