The federal government's bond purchasing program, known as "quantitative easing," may be coming to an end soon. The third round of quantitative easing, known as QE3, ended at the end of October 2014 and may be the last quantitative easing round as the U.S. economy slowly and imperfectly slides out of crisis and into a troubled recovery. During QE3 alone, which began in 2012, the U.S. government infused the bond market with $1.7 trillion--that's trillion with a "t", folks. During the entire nearly six year program, just over $4.4 trillion was pumped into the economy. The bond buybacks began moderately at first, but as the crisis deepened in 2008, the program expanded from just over $800 billion to $2.4 trillion in 2009. By the end of October 2014, the total had reached its current whopping $4.4 trillion in bond purchases. The purpose of the program was to create stability in the bond market, to control interest rates and to free up cash for banks to have enough capital to continue to make new loans. Although there appears to be debate among economists as to how well quantitative easing has worked, interest rates have been hovering between 3.0% and 4.0% for several years, making home loans attractive to consumers, though perhaps less so to many investors.

What exactly does all of this mean for the future? If the federal government rolls back quantitative easing or cancels it altogether, it will almost certainly mean higher interest rates for borrowers in the residential real estate market. This in turn could mean that people who would qualify for a loan under quantitative easing may no longer qualify once the program has been terminated. Many others who do still qualify will have to live with higher interest payments, higher monthly payments, and perhaps less house for the money. Somewhat offsetting this likely outcome is the fact that house prices are near 10-year lows and in some markets have even dipped a bit from what they were at the beginning of 2014. So a higher interest rate is not as serious as it would have been had prices remained high. There is good and bad news here. The bad news is that even the federal government may have finally reached its spending limit and has buried itself in deficit spending, which could have dire consequences for the government's credit rating. The good news is that the feds may have determined that the U.S. economy, while sluggish, has recovered sufficiently to terminate the program and is no longer in danger.