February foreclosure activity was down 4 percent from the previous month but still up 57 percent from February 2007, according to the latest RealtyTrac U.S. Foreclosure Market Report. So does the monthly decrease mean we've hit a ceiling of sorts for this cycle in terms of foreclosures?

Probably not.

The February monthly decrease is more likely a seasonal decrease helped along by a shorter-than-average month and the fact that January's numbers are often padded with some pent-up foreclosure activity from the holiday season. That premise is supported by looking at the numbers in February 2007, when U.S. foreclosure activity was down 6 percent from January. Foreclosure activity continued to climb for the remainder of that year.

The more important indicator is the year-over-year increase, which has been between 50 percent and 60 percent for both January and February. If you look back at the RealtyTrac monthly reports, activity has increased on a year-over-year basis every month since January 2006, the first month that YOY stats were available.

So the overall trend -- at least on a national basis -- is steadily upward. Eventually the bleeding will stop, and the fundamentals of a healthy real estate market will be restored. The million dollar question (or millions and millons of dollars if you're a really smart investor) is, when will that be? Will we see another series of three more lines that are all higher than the lines in the graph above, or will there be just one more year of rising foreclosures, or two? Let us know what you think.

View full February report.