Bluerock Homes Trust, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk We are exposed to interest rate risk primarily through borrowing activities. There is inherent roll-over risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements. We are not subject to foreign exchange rates or commodity price risk, and all our financial instruments were entered into for other than trading purposes. Our interest rate risk is monitored using a variety of techniques. The table below ($ in thousands) presents the principal payments and the weighted average interest rates on outstanding debt, by year of expected maturity, to evaluate the expected cash flows and sensitivity to interest rate changes. A negligible amount of fair value adjustments and unamortized deferred financing costs, net, are excluded. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 Thereafter Total Mortgage Notes Payable ​ $ 773 ​ $ 1,639 ​ $ 1,717 ​ $ 37,471 ​ $ 866 ​ $ 55,019 ​ $ 97,485 ​ Weighted Average Interest Rate ​ 4.15 % 4.19 % 4.20 % 4.13 % 5.81 % 6.26 % 5.35 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving Credit Facilities ​ $ — ​ $ 70,000 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 70,000 ​ Weighted Average Interest Rate ​ — ​ 8.03 % — ​ — ​ — ​ — ​ 8.03 % ​ The fair value of mortgages payable is estimated at $92.8 million as of June 30, 2023. The table above incorporates those exposures that exist as of June 30, 2023; it does not consider those exposures or positions which could arise after that date. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period and interest rates. As of June 30, 2023, we had interest rate caps and swaps, which are not accounted for as hedges, that we primarily use as part of our interest rate risk management strategy. Our interest rate caps and swaps effectively limit our exposure to interest rate risk by providing a ceiling on the underlying interest rate for $94.1 million of our debt. Based on our debt outstanding and interest rates in effect at June 30, 2023, a 100-basis point increase or decrease in interest rates on the portion of our debt bearing interest at variable rates would increase interest expense by approximately $50,000 or decrease interest expense by approximately $50,000, respectively, for the quarter ended June 30, 2023.