Why Zillow Shares Are Tumbling Today

Zillow Group Inc Z ZG is trading lower Monday morning after the company put its home purchasing program on pause to work through the renovation and selling of homes it has already purchased.

Zillow said its Zillow Offers business will not sign any new contracts to buy homes through the end of the year, citing a backlog in renovations and operational capacity constraints.

"We're operating within a labor- and supply-constrained economy inside a competitive real estate market, especially in the construction, renovation and closing spaces," said Jeremy Wacksman, COO of Zillow.

Wacksman continued, "We have not been exempt from these market and capacity issues and we now have an operational backlog for renovations and closings. Pausing new contracts will enable us to focus on sellers already under contract with us and our current home inventory."

Zillow is an internet-based real estate company that has historically focused on deriving ad revenue from third-party brokers on online marketplaces.

Zillow Offers is a service in which homeowners can sell without having to coordinate repairs or host open houses or showings.

Z Price Action: Zillow has traded as high as $208.11 and as low as $83.93 over a 52-week period.

The stock was down 8.50% at $86.90 at time of publication.

Photo: courtesy of Zillow.