The pace of home foreclosures has slowed down. According to Realty Trac the number of U.S. households facing foreclosure last month grew 6 percent from the level a year ago. That’s the smallest annual increase in four years.

Chris Thornberg of Beacon Economics says that slower rate of foreclosure growth looks promising, until you realize that during the fourth quarter of last year roughly 14 percent of all mortgages held in California were delinquent. That’s nearly four times higher than any point before the most recent real estate cycle. And Thornberg believes we won’t see a true recovery in this sector, until the government stops propping up many underwater mortgage holders.

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