Homes.com, Zillow And The Affordability Stakes Of Who Controls The Listing Marketplace 

President Trump has made housing affordability the centerpiece of his domestic economic agenda, and for good reason. After four years of Biden-era inflation that priced millions of young families out of the market, the President highlighted declining mortgage costs in his 2026 State of the Union.

He signed an executive order to stop large institutional investors from buying single-family homes that belong in the hands of American families. He directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities to drive down borrowing costs.

The message from this White House is unambiguous: restoring the American Dream of homeownership is a top priority, and Washington is finally doing something about it.

So why are two Wall Street hedge funds trying to shut down a company that is building more competition, more transparency and more options for the very homebuyers the President is fighting for?

 CoStar Group, the dominant provider of commercial real estate data, has spent the last several years building Homes.com into a legitimate challenger to Zillow’s near-monopoly in residential real estate listings. The business model difference matters directly to housing costs.

Zillow monetizes consumer inquiries by routing them away from listing agents and toward paying “Premier Agents” who bid for lead placement, or by collecting referral fees of up to 40% of the agent’s commission when a transaction closes. Those costs do not vanish. They get passed through to buyers and sellers in the form of higher commissions and less flexible pricing, making an already unaffordable market even worse.

Homes.com operates on a fundamentally different model. Its “Your Listing, Your Lead” approach connects buyers directly with the listing agent, whether or not that agent pays Homes.com anything. That creates real downward pressure on agent costs across the market. It is exactly the kind of pro-consumer, pro-competition innovation that free enterprise is supposed to produce.

The hedge funds in control

Now Third Point and D.E. Shaw, two hedge funds that each hold roughly 2% of CoStar’s outstanding shares, have publicly demanded the company abandon Homes.com entirely, replace its founder-CEO, and restructure on their timeline. Strip away the financial jargon and what they want is simple: CoStar should exit residential real estate so these funds can harvest a short-term stock price bump.

The result would be one fewer competitor in a market where the FTC has found that roughly 85% of internet listing revenue is already concentrated among a handful of players and where the government has sued Zillow for paying a competitor to exit the market. Forcing Homes.com out through shareholder pressure would accomplish the same reduction in competition, just through a different door.

Anyone tempted to trust these firms’ judgment should look at their records. At Advance Auto Parts, Third Point secured three board seats in 2024 with no disclosed operational plan, then bailed out six months later after the stock fell nearly 50 percent. At Sony, Third Point demanded a spinoff of the semiconductor division. Management had the backbone to refuse.

That business achieved nearly 12% annual revenue growth, and Sony outperformed the S&P 500 by over 53 percentage points by the time Third Point walked away. D.E. Shaw pushed FIS to spin off its Worldpay payments unit. FIS shares have fallen more than 30% since settlement while the S&P 500 gained over 76%. The pattern is consistent: bold demands, board seats won, value destroyed and a quick exit before the bill comes due.

Homes.com aligned with affordability agenda

Unfortunately, the policy stakes here go well beyond one company’s stock price. The Trump administration has correctly identified housing affordability as a crisis and is pursuing a serious agenda built on expanding supply, cutting red tape, and putting American families ahead of institutional investors. CoStar’s Homes.com investment is squarely aligned with that agenda. It introduces competition into a concentrated market. It offers consumers a more transparent experience. 

It recently launched Homes AI, a conversational AI tool that helps homebuyers navigate their search using proprietary data no competitor can replicate. The company has committed to cutting Homes.com spending by over $300 million this year and projects the platform will reach profitability by the end of the decade, with company-wide revenue growth of 18% and an 83% increase in adjusted EBITDA in 2026.

The SEC’s push to allow semiannual reporting, backed by the President, reflects a growing recognition that the quarterly earnings treadmill empowers exactly this kind of short-horizon activism at the expense of the long-term investment and job creation that actually build a stronger economy.

Wall Street should not compete with Main Street

President Trump is right that Wall Street should not be allowed to compete with Main Street when it comes to buying homes. The same principle applies to building the platforms that help Americans find and buy those homes.

If Third Point and D.E. Shaw get their way, there will be one fewer competitor in residential real estate, less transparency for homebuyers, and more pricing power for the incumbent monopoly. That is not a free-market outcome. It is the kind of Wall Street self-dealing that voters sent this President to Washington to stop. 

Jared Whitley is a long-time politico who has worked in the U.S. Congress, White House, and defense industry.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: zeb@hwmedia.com.