The shares of Zillow dropped more than 10% after the firm decided to stop buying new properties for the rest of the year in order to clear the backlog of already-signed contracts.

The company attributed the shortage to a labor shortage and other supply issues

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"We have not been immune to market and capacity difficulties, and we now have a backlog of repairs and closures to complete. We'll be able to focus on the sellers who are already under contract with us and our current home inventory if we put new contracts on hold "In a note, Chief Operating Officer Jeremy Wacksman stated.

According to the company, the Zillow Offers service connects potential sellers with a local agent partner.

Homeowners may utilize Zillow Offers to sell their homes without having to coordinate repairs or host open houses or showings. After purchasing a home, Zillow prepares it for sale by undertaking the same improvements that a typical seller would, before placing it on the open market.

The company, which purchased more than 3,800 homes in the second quarter, has seen its stock price drop roughly 27% this year after nearly tripling in 2020 amid the pandemic-fueled housing market bubble.