The majority of mortgage rates fell this week, according to Freddie Mac’s (FRE) weekly mortgage market survey, which was released Thursday, the same day that RealtyTrac reported a 9% increase in foreclosure activity in the first quarter.

According to RealtyTrac’s U.S. foreclosure market report, in the first quarter of 2009, 803,489 properties or one in every 159 housing units received a foreclosure filing, including default notices, auction sale notices and bank repossessions. In the month of March, there was a 17% increase in foreclosure filings from February, and a 46% increase in filings from March of 2008.

“In the month of March we saw a record level of foreclosure activity -- the number of households that received a foreclosure filing was more than 12 percent higher than the next highest month on record,” said James J. Saccacio, chief executive officer of RealtyTrac, in a press release. “Since much of this activity was in new foreclosure actions, it suggests that many lenders and servicers were holding off on executing foreclosures due to industry moratoria and legislative delays.”

Saccacio also noted that the temporary drop in foreclosure activity had more to do with processing delays than foreclosure prevention programs.

“It’s very likely that we’ll see the number of REOs increase again now that most of the moratoria have been lifted,” Saccacio said.

The Sun Belt states, Nevada, Arizona, and California saw the highest state foreclosure rates during the quarter; however, Saccacio said demand for property in these areas is up slightly.

“On a positive note, it appears that demand is up in some of the harder-hit areas, particularly on bank-owned REO properties that first time homebuyers and investors see as bargains,” Saccacio said.

Meanwhile, average rates for most mortgages were down this week, according to Freddie Mac’s Primary Mortgage Market Survey. The 30-year fixed-rate mortgage fell to 4.82%, with an average 0.6 point, down from last week’s average of 4.87%. The 30-year fixed rate mortgage has fallen significantly from its average one year ago of 5.88%.
The average 15-year fixed-rate mortgage fell to 4.48% with an average 0.6 point, which is the lowest average recorded since the survey began in August of 1991. Last week’s average was 4.54% and one year ago, the 15-year fixed-rate mortgage averaged 5.40%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages fell to their lowest recorded rate since Freddie Mac started tracking the mortgages in January 2005. This week, the 5-year ARM averaged 4.88%, with an average 0.6 point, down from last week’s average of 4.93%. One year ago, the average was 5.48%.

The only mortgage rate to rise this week was the one-year Treasury-indexed adjustable-rate mortgage. One-year ARM’s rose this week to an average rate of 4.91%, with an average 0.7 point, compared to last week’s average of 4.83%. One year ago, the average was 5.10%.