Company: ADAMM
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001273685-25-000047
Chunk: 92

Company: ADAMAS TRUST, INC.
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 1
Chunk 92
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 February 2025, up 3.0 months from February 2024. Additionally, according to Zillow Economic Research, the inventory of available homes at the end of March 2025 amounted to the most homes available in March since 2020. However, relatively elevated interest rates continue to contribute to affordability challenges for home buyers. According to Freddie Mac, the weekly average 30-year fixed-rate mortgage was 6.83% as of April 17, 2025, down 0.27% year-over-year. According to data provided by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, privately-owned housing starts for single-family homes averaged a seasonally adjusted annual rate of 1,012,333 for the three months ended March 31, 2025, as compared to 1,013,583 for the twelve months ended December 31, 2024. Declining single-family housing fundamentals may adversely impact the overall credit profile and value of our existing portfolio of single-family residential credit investments and the value of our single-family rental properties, as well as the availability of certain of our targeted assets.

Rental Housing. According to data provided by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, starts on multi-family homes containing five or more units averaged a seasonally adjusted annual rate of 359,333 for the three months ended March 31, 2025, as compared to 336,167 for the twelve months ended December 31, 2024. According to RealPage Analytics, effective rents for professionally managed apartments grew 1.1% for the twelve months ended March 2025, which marked the highest such twelve month growth since June 2024, but RealPage Analytics noted that this rent growth was not uniform nationwide and that effective rents in the Southeast and Texas, where oversupply conditions remain challenging and where a significant amount of our multi-family investments are concentrated, saw effective rents contract for the twelve months ended March 2025. Weakening multi-family housing fundamentals, including, among other things, increasing supply of apartments and declining rents in the markets or submarkets in which we invest, increasing interest rates, widening capitalization rates and reduced liquidity for owners of multi-family properties, may cause our operating partners to fail to meet their obligations to us and/or contribute to reduced cash flows from and/or valuation declines for multi-family properties, and in turn, many of the multi-family investments that we own.

Credit Spreads.