Foreclosure filings are continuing to fall, dropping 2 percent in the first quarter of this year compared to the previous quarter and are down 16 percent compared to the same time last year, RealtyTrac reports in its latest report.

Foreclosure filings include default notices, scheduled auctions, and bank repossessions.

Filings were at their lowest quarterly total since the fourth quarter of 2007. In the first quarter of this year, one in every 230 U.S. homes received a foreclosure filing, according to the report. But analysts warn to take the progress in numbers with caution.

“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” says Brandon Moore, RealtyTrac CEO. “There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March.

“The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen—both in terms of new foreclosure activity and new short sale activity.”

5 States Seeing the Biggest Increases

For the third straight month, foreclosure starts have increased, rising 7 percent from February to March. For the first time since November 2011, foreclosure starts surpassed the 100,000 mark, according to RealtyTrac. However, starts were still down 11 percent compared to March 2011.

Thirty-one states saw monthly increases in foreclosure starts last month. The five states posting the largest monthly increases in foreclosure starts are:

1. Nevada: Up 153%

2. Utah: Up 103%

3. New Jersey: Up 73%

4. Maryland: Up 53%

5. North Carolina: Up 47%

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