The 30-year fixed-rate mortgage averaged 2.98% this week, the lowest rate in Freddie Mac’s records dating back to 1971.

“The drop has led to increased home buyer demand and, these low rates have been capitalized into asset prices in support of the financial markets,” says Sam Khater, Freddie Mac’s chief economist. “However, the countervailing force for the economy has been the rise in new virus cases which has caused the economic recovery to stagnate, and this economic pause puts many temporary layoffs at risk of ossifying into permanent job losses.”

Freddie Mac reported the following national averages with mortgage rates for the week ending July 16:

• 30-year fixed-rate mortgages: averaged 2.98%, with an average 0.7 point, falling from a 3.03% average last week. A year ago, 30-year rates averaged 3.81%.
• 15-year fixed-rate mortgages: averaged 2.48%, with an average 0.7 point, falling from last week’s 2.51% average. A year ago, 15-year rates averaged 3.23%.
• 5-year hybrid adjustable-rate mortgages: averaged 3.06%, with an average 0.3 point, rising slightly from last week’s 3.02% average. A year ago, 5-year ARMs averaged 3.48%.

Freddie Mac reports average commitment rates along with average fees and points to reflect the total upfront cost of obtaining a mortgage.

Record low mortgage rates can save buyers money when financing a home purchase. But realtor.com® warns that those rock-bottom rates may make it more difficult for first-time buyers in the future.

A shortage of affordably priced homes is causing first-time home buyers to face fierce competition, even during the pandemic and a recession.

But as the economy eventually recovers and mortgage rates rise over the next few years, homeowners who bought or refinanced their mortgages this year may be tempted to hold onto their properties longer. That could then in turn hamper future first-time buyers in their search for starter homes, as their current owners remain in them.

If “rates move up and you want to trade up to a bigger home, you not only have to pay more for the bigger home, but you would also have to pay more to borrow money,” says Danielle Hale, realtor.com®’s chief economist. “That starts to make it less appealing to trade up. There could be fewer entry-level properties for resale. It creates a scarcity of homes for first-time buyers.”

For the week ending July 16, the 30-year fixed-rate mortgage dipped to a record low average of 2.98%, Freddie Mac reports. Those who snag rates that low may face a “locked in” situation, which has been considered a factor for preventing homeowners from moving in the recent past. Black Knight found when looking at rates and home listings from 2013 to 2018 that homeowners who had low fixed-interest rates were the least likely to list their homes for sale.

“Prior to the pandemic, we did see homeowners’ mobility trending lower over the last few years,” Joel Kan, an economist with the Mortgage Bankers Association, told realtor.com®. “We’d also seen an increase in home improvement spending. Low rates could play a part in this increased homeowner tenure.”

While the flexible office space market known as coworking had already started to slow prior to the pandemic, concerns over the spread of germs and related issues leave some housing analysts concerned whether coworking spaces can survive.

But commercial giant JLL is still bullish on the sector. In a new report, The Impact of COVID-19 on Flexible Space, JLL notes that coworking space may be the alternative that companies seek in the post-COVID-19 world to shrink their office footprints for a more flexible option.

“Despite the current distress within the coworking sector, we’re reiterating our position that office space will be fundamentally different in the future, as companies shift away from the long-term leased and owned space to more agile solutions,” Scott Homa, JLL’s senior director of office research, told Commercial Property Executive. “COVID-19 will accelerate a movement toward asset-light workplaces, where work-from-home and remote work blends seamlessly with the corporate office. Even with some coworking operators shrinking their footprints, we still believe 30 percent of office space will be consumed flexibly by 2030.”

The coworking market can include on-demand workspaces, memberships for some locations, short-term flexible spaces, and more traditional spaces with flexible arrangements.

JLL believes that flex-space operators that offer a hybrid model including long-term leases, private office space, and coworking options will be the most likely to weather any downturn. Also, flex-space operators will need to be prepared to adjust their workspaces. Tenants may be drawn to flex spaces as options to serve as smaller satellite offices.

Still, the sector likely will face headwinds. “Owners will have a growing challenge on their hands in the months ahead, as venture-funded coworking companies continue to default on rent payments in some locations,” Homa told Commercial Property Executive. “This will force important decisions among landlords about how to respond and spur continued evolution of the flexible space sector, most notably in the financial structure of deals—fewer long-term leases and more revenue-share/management agreements.”

As remote working grows more common, homeowners are trying to carve out more space, indoors and out, for a dedicated home office. When space is tight or household noise is too loud, some homeowners are taking their office outside. The backyard home office is a growing trend, The New York Times reports.

Some homeowners are taking inspiration from the “man cave” and “she shed” phenomenon of the last few years and putting up shed-style home offices. For example, the company Studio Shed offers prefabricated panels that can be shipped, built, and assembled in a backyard to create a 100-square-foot home office. James Wilson in Oakland, Calif., who works in finance, and his wife Meg Wilson, a nurse practitioner who engages in telehealth, used one to create a private backyard office. From the time they ordered it until their backyard office was complete spanned a little over four weeks at a cost of $31,000.

Space-constrained homeowners are looking for solutions for a workspace. For some, it’s even been motivation to move. A recent survey of real estate agents conducted by HomeLight says that a designated home office will likely be the most desirable or important feature to home buyers in a post-pandemic era.

Homeowners who want to stay put are turning to their backyard to make space. Several companies are touting backyard solutions, like Kanga Room Systems (units start at about $5,000 for an 80-square-foot kit the buyer can assemble) and Modern Shed. These companies can ship standalone structures that can be assembled by homeowners to keep their home offices separated from their living spaces.

Studio Shed officials say they’ve doubled their sales over the last year. In April alone, their sales were four times it was a year prior. The company’s units start at $10,000.

The Modern Shed says they’ve noticed their orders drastically increasing as well. “We’ve always offered this very simple solution because you don’t need to tear up an existing house and you can just add it to your backyard,” Ryan Grey Smith, founder of Modern Shed, based in Seattle, told The New York Times. “It’s this little structure where you can feel like you’re working miles away, even though you’re only 30 feet away.”