(Reuters) - Real estate information provider CoStar Group (NASDAQ:CSGP) cut its annual revenue forecast on Tuesday, as high interest rates restrained spending and discouraged property buying.
Shares of CoStar, which competes with rival home-search sites like Zillow (NASDAQ:ZG) and Redfin (NASDAQ:RDFN), were down 1.1% in extended trading.
The housing market has been one of the hardest hit by the U.S. Fed's high interest rate regime since early 2022. Last year, existing home sales fell to their lowest levels since 1995, with the supply of homes for sale remaining tight.
Many homeowners are reluctant to sell because their current home loans are locked in at much lower rates, and buying another house would likely mean higher rates and added costs.
This limited inventory continues to keep house prices inflated.
The Washington, D.C.-based CoStar Group now expects annual revenue to be between $2.74 billion and $2.75 billion, compared to its prior expectations of $2.76 billion to $2.77 billion.
Analysts, on average, expected annual revenue of $2.77 billion, according to LSEG data.
The company expects third-quarter revenue to be between $692 million and $697 million, the mid-point of which is below
estimates of $703.5 million.
For the second-quarter ended June 30, CoStar's revenue rose 12% to $678 million, compared with estimates of $677.2 million. It earned an adjusted profit per share of 15 cents, compared with average estimates of 9 cents per share.