Rear of 2014 ILX with 3 passengers in the rear.

i just changed the rear shock absorbers and noticed the rear sagging a lot when I have 3 passengers in the rear (~500 pounds). Is this normal or is something broken or needs to be replaced. The rear shocks were just replaced with kyb gas a just shocks.

 

Spring rates are a "happy medium" between loaded and unloaded. If the springs were for 500 lbs in the rear it would ride like a buckboard with only the driver.
When I was a kid, my next door neighbors had to pull their 60's VW bug out onto the street before the family got in so it wouldn't drag getting out of the driveway. All 6 children in the back.

 

So this is normal? I never have passengers in the back, and if I do I’m already in the car so I’ve never observed how low the car looked. Just making sure it’s normal or the shocks were installed properly.

if there was anything wrong it would be the springs right? The car sits at the normal height unloaded.

 

Yes. If you normally load that heavily, you may want stronger springs. In the past when I periodically loaded heavy I added an air overload system so I wouldn't have a bouncy ride when driving alone. As long as nothing rubs it won't hurt anything.
Many people buy lowering springs to get to that height.