Absorption measures how quickly inventory is being removed from the market relative to what's available. For housing professionals, that metric is one of the clearest signals of negotiating power in real time. When absorption is elevated, homes clear quickly and sellers retain leverage. When absorption falls and supply builds, timelines stretch and buyers gain negotiating flexibility.
According to the First American Real House Price Index, which adjusts prices for income and interest rate changes, housing affordability has posted its longest stretch of annual improvement since late 2019 and early 2020. Wage gains outpaced home-price appreciation in 2025 and mortgage rates eased off their peaks, helping repair some of the damage. But the progress has been far from uniform.