U.S. foreclosure activity in April jumped 32 percent from a year ago to a record high, and should mount because temporary freezes on foreclosures ended in March, RealtyTrac said on Wednesday.

One in every 374 households with mortgages got a foreclosure filing in April, the highest monthly rate since RealtyTrac began tracking it in January 2005. Filings were reported on 342,038 properties last month.

The abundance of distressed properties keeps pressuring home prices, thwarting a housing recovery that is critical to rejuvenating the recessionary U.S. economy.

Most of April's filings, which included notices of default and auctions, were in early stages. Bank repossessions, known as real-estate owned or REOs, fell on a monthly and annual basis to the lowest level since March 2008.

This suggests that many lenders and servicers are beginning foreclosure proceedings on delinquent loans that had been delayed by legislative and industry moratoria, RealtyTrac chief executive James J. Saccacio said in a statement.

A temporary foreclosure freeze by major banks and government-controlled home funding companies Fannie Mae and Freddie Mac ended before President Barack Obama's massive housing stimulus, unveiled on March 6, could take root.

It's likely that we'll see a corresponding spike in REOs as these loans move through the foreclosure process over the next few months, Saccacio said.

Foreclosure activity rose less than 1 percent in April from March to post the second straight monthly record. A dip would have been more typical following the March jump, but the moratoria caused artificial delays, RealtyTrac said.

It looks like the dam burst in March and continued in April, Rick Sharga, senior vice president at RealtyTrac in Irvine, California, said in an interview.

Unemployment that is at its highest rate in more than a quarter century has left many borrowers drowning in debt even as new federal housing relief starts to trickle in.

Fear of losing a job is also draining consumer confidence and the willingness to commit to such a large purchase.

Still, housing affordability is at a record high and the deeply discounted foreclosure market accounts for more than half of home sales activity.

Home prices have tumbled more than 30 percent from their 2006 peaks, based on Standard & Poor's/Case-Shiller indexes.

Also luring first-time home buyers are new federal tax credits and mortgage rates at generational lows. Fixed 30-year mortgage rates averaged 4.81 percent in April, down from 5.92 percent a year earlier, Freddie Mac said.

RealtyTrac expects at least three or four months of high foreclosure activity before the wave ebbs, noting a lag of up to six months between unemployment and foreclosure.

If we continue to see buying activity increase, if the jobs market continues to improve and if the price depreciation slows down we could start to see a pretty significant effect on foreclosure levels before the end of the year, said Sharga. But those are three pretty big ifs.

RECOVERY WILL BE VERY LOCALIZED

States where sales and prices soared most during the five-year housing boom earlier this decade remained the hardest hit. Nevada was the state with the highest foreclosure rate even though filings fell 18 percent in April from March and bank repossessions dropped 44 percent.

With one of every 68 households with loans getting a filing, more than five times the national average, total foreclosure activity surged 111 percent from April 2008.

Florida, like Nevada, suffers from a glut of unsold and often unoccupied properties built on enormous demand from investors looking to flip the units quickly for large profits.

A 37 percent monthly foreclosure activity jump in April pushed total filings up 75 percent from a year earlier in Florida. One in every 135 households with loans there got a filing, driven by a spike in default and auction notices even as bank repossessions fell 7 percent from March.

California had the third highest state foreclosure activity rate in April after a 10 percent drop from March, with one in every 138 housing units getting a filing.

Arizona was in fourth place, followed by Idaho, Utah, Georgia, Illinois, Colorado and Ohio.

The 10 states with the most properties getting filings accounted for more than three-quarters of the national total, RealtyTrac said. California had the highest number of filings, followed by Florida, Nevada and Arizona.

Las Vegas had the highest foreclosure rate among metro areas with populations of at least 200,000 even though filings fell 20 percent in April from March. One in every 56 Las Vegas households with loans got a filing in April, almost seven times the national average.

Cape Coral-Fort Myers, Florida and Merced, California were in second and third place.

Considering these severely effected regions, the recovery is going to be a very localized phenomenon, said Sharga.