Market Absorption Rate

Definition of "Market absorption rate"

Scott A. Field
Scott A. Field Signature Real Estate

The rate at which a market can absorb additional units of supply without causing market saturation and severe price distortions. For example, during a recessionary period, many homeowners may list their house for sale. Since the supply of homes entering the home resale market increased without a corresponding increase in demand, the market absorption rate has been exceeded, and the market price of the resale homes declines.

Search Real Estate Glossary

Related Real Estate Glossary terms

Related Real Estate FAQ