The U.S. housing market is back on its feet, aided by rising home prices, steady job growth and fewer troubled loans.
More U.S. homeowners are also keeping up with their mortgage payments. March was the 42nd straight month where U.S. foreclosure activity dropped from year-ago levels.
The number of U.S. home foreclosure filings slid 23 percent in March from a year ago, helping bring first-quarter foreclosure activity to its lowest level since the second quarter of 2007, a report from RealtyTrac showed on Thursday.
There were 117,485 U.S. properties with default notices, scheduled auctions and bank repossessions in March, RealtyTrac reported.
That lifted overall foreclosure activity by 4 percent last month from February, when it posted an over seven-year low. The monthly increase was driven by a 7 percent rise in foreclosure starts, which is the initial public notice starting the property seizure process.
"Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time,'' said Daren Blomquist, vice president at RealtyTrac.
Banks are expected to devote more resources to dealing with the lingering inventory of nearly half a million already-foreclosed homes that still need to be sold, said Blomquist.
Currently, about 10 percent of so-called bank-owned properties are listed for sale and more than half are still occupied by the former homeowner or renter.
A total of 28,840 U.S. properties were repossessed by lenders in March, down 5 percent from February, and marking a drop of 34 percent from the same month a year ago to their lowest level since July 2007.
There were 27,147 scheduled foreclosure auctions in judicial states in March, up 9 percent from February and up 4 percent from March 2013. Scheduled foreclosure auctions in non-judicial states totaled 23,511 in March, up 3 percent from February, but down 27 percent from March 2013.
Some non-judicial states, including Utah, Oregon and Colorado, bucked the overall trend and saw increases in scheduled foreclosure auctions from a year ago.
Judicial states have seen the time it takes to foreclose increase compared to their counterparts, partly due to the intensive process and the large volume of cases the courts have to handle.
Florida posted the highest foreclosure rate among all states last month, followed by Maryland and Nevada.