The foreclosure activity in the US for the first quarter declined to the lowest level since the fourth quarter of 2007, according to a report by RealtyTrac.

RealtyTrac, an online marketplace for foreclosure properties, said Thursday that foreclosure filings were reported for 572,928 properties for the quarter, which is 2 percent less than those accounted in the last quarter. This is a 16 percent decrease compared to the first quarter of 2011.

For March alone, foreclosure filings were reported on 198,853 US properties, which is a 17 percent decrease from March 2011. This was the first time since July 2007 that the number of foreclosure filings came below 200,000.

Foreclosure filings include default notices, scheduled auctions and bank repossessions. The fall in the foreclosure filings has been reported mainly following decrease of activity in states that use the non-judicial foreclosure process. For the quarter, there has been an increase in judicial foreclosure activity. Judicial states accounted for 243,074 properties with foreclosure filings during the quarter.

Releasing its US Foreclosure Market Report for the quarter, RealtyTrac said that Nevada, California and Arizona posted top state foreclosure rates during the quarter while California, Florida and Illinois recorded top foreclosure activity totals.

Brandon Moore, CEO of RealtyTrac, said that the low foreclosure numbers in the first quarter were not an indication that the massive reservoir of distressed properties built up over the past few years had somehow miraculously evaporated.

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, Moore added.

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, he said.

Meanwhile, the first-time foreclosure starts increased 7 percent in March compared to the previous month. This is the third straight monthly increase. First-time foreclosure starts include default notices and scheduled foreclosure auctions.

Nevada had the biggest monthly increase in foreclosure starts, which was up by 153 percent, followed by Utah, which was up by 103 percent. Altogether thirty one states have seen increase in foreclosure starts for March.