With unemployment high, markets on a hair trigger and the memory of Washington debt-ceiling gridlock still fresh, many Americans are reluctant to put their money toward any venture that could be less than fully secure.
Despite efforts on the part of the White House and the Federal Reserve to encourage borrowing and spending, many consumers and investors are less than eager to take the kinds of risks that could stimulate economic growth -- even as the economy risks entering a new recession. With businesses hesitant to hire workers, and with consumers hesitant to make big purchases, fears about the state of the economy could make the economy worse.
Last week, the Fed announced it would be keeping interest rates near zero through the middle of 2013, a policy meant to spur borrowing and keep the economy from slowing to a standstill. But many consumers remain skittish about taking on new debt, especially if they already have loans to pay off, the New York Times reports.
In the housing market, the low rates appear to have resulted in few new mortgage refinancings so far, according to NPR. The housing sector has been plagued by falling home prices for the last five years, and its recovery is seen as a precondition to the broader economic recovery.
Read the full story at The Huffington Post.
For more insight on mortgages and refinancing see these AOL Real Estate guides:
Mortgage Jargon in Simple Terms
Refinancing Do's and Don'ts
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- Four Ways to Benefit From a Cash-In Refinance