What is a real estate absorption rate?

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ANSWER The number shows the rate at which the inventory of homes for sale are being sold. A declining figure indicates people the inventory is decreasing as more homes are being sold than are coming onto the market. A rising absorption rate implies that there are more homes coming onto the market than there are buyers willing to buy at the market prices. The absorption rate lets you know how well the market is absorbing the current inventory of listings. The ultimate question the absorption rate answers is, "Is the current inventory level shrinking or growing"?
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