Absorption rate is a measure of supply and demand. In real estate it is the measure of the rate at which homes sell in a specific market over a given period of time.
The higher the absorption rate, the faster homes are selling
The absorption rate is calculated by dividing the number of homes sold over the given time period by the number of homes still for sale.
\begin{aligned} &\text{Absorption Rate} = \frac{ \text{Average Sales} }{ \text {Available} } \\ &\textbf{where:} \\ &\text{Average Sales} = \text{Average Number of Sales Per Month} \\ &\text{Available} = \text{Total Number of Available Properties} \end{aligned}