Home foreclosure rates in the Raleigh-Cary metro area and across North Carolina increased more than 25 percent in the first quarter of 2008 compared with the same time period in 2007.

Owners of some 3,570 properties in Raleigh-Cary received some sort of foreclosure notification, up 25.53 percent from 2007, according to the real estate data-tracking firm RealtyTrac. The first-quarter increase from the previous year was 7.37 percentage points higher than the increase that happened in the last quarter of 2007.

A rate of 7.07 foreclosure actions per 1,000 homes ranks Raleigh-Cary 65th among the nation's top 100 metro areas.

RealtyTrac didn't report data from Durham, which isn't included in the Raleigh-Cary statistics.

North Carolina, the nation's 10th-largest state in population, ranked 25th in foreclosure actions in the first quarter, with 10,283 properties involved in foreclosure action of some kind, That total is up 26 percent compared with the first quarter of 2007 and up 3.4 percent from the fourth quarter.

The trend has pinched the region's home-building industry. Fewer than 1,600 building permits for new homes were issued across Wake County during the first three months of this year, down 39 percent from the 2,585 issued during the same period a year ago.

"The market is slowing down," contractor Joseph Parulski said, noting he isn't hiring more workers. "The people who don't know a whole lot of building trying to get in (the market) are going to have a tougher time."

Mike Walden, a North Carolina State University economist, said the construction slowdown is a sign nationwide economic troubles are now hitting the Triangle.

"People should be worried, but it's part of the process of squeezing out the excess supply in the housing market," Walden said. "The bottom line is there are too many homes for sale and too few buyers."

Nationally, the number of U.S. homes heading toward foreclosure more than doubled in the first quarter from a year earlier, as weakening property values and tighter lending left many homeowners powerless to prevent homes from being auctioned to the highest bidder, RealtyTrac added.

Among the hardest-hit states were Nevada, Florida and California, where Stockton led the nation with a foreclosure rate that was 6.6 times the national average, Irvine, Calif.-based RealtyTrac Inc. said.

Nationwide, 649,917 homes received at least one foreclosure-related filing in the first three months of the year, up 112 percent from 306,722 during the same period last year, RealtyTrac said.

The latest tally also represents an increase of 23 percent from the fourth quarter of last year.

RealtyTrac monitors default notices, auction sale notices and bank repossessions.

All told, one in every 194 households received a foreclosure filing during the quarter. Foreclosure filings increased in all but four states.

The most recent quarter marked the seventh consecutive quarter of rising foreclosure activity, RealtyTrac noted.

"What would normally alleviate the foreclosure situation in a normal market is people starting to buy properties again," said Rick Sharga, RealtyTrac's vice president of marketing.

However, the unavailability of loans for people without perfect credit and a significant down payment is slowing the process, he said.

"It's a cycle that's going to be difficult to break, and we're certainly not at the breaking point just yet," Sharga added.

Raleigh developer Dan Tingen said lenders aren't dishing out money like they have in the last few years.

"We're all just being very very cautious," Tingen said. "Those of us that are healthy enough to survive, we realize that we've got to pull back a little bit, and then we'll go right back into it."

Walden and other economists said the economic slowdown could last into 2009.

The surge in foreclosure filings also suggests that much-touted campaigns by lawmakers and the mortgage lending industry to help at-risk homeowners aren't paying off.

Hope Now, a Bush administration-organized mortgage industry group, said nearly 503,000 homeowners had received mortgage aid in the first quarter. Most of the aid was temporary, however.

Pennsylvania was a notable standout in the latest foreclosure data. The number of homes in the state to receive a foreclosure-related filing plunged 24.4 percent from a year earlier.

Sharga credited the decline to the state's foreclosure relief measures, noting that cities such as Philadelphia put in place a moratorium on all foreclosure auctions for April and implemented other measures aimed at helping slow foreclosures.

Nearly 157,000 properties were repossessed by lenders nationwide during the quarter, according to RealtyTrac.

The flood of foreclosed properties on the market has contributed to falling or stagnating home values, yet lenders have yet to implement heavy discounts on repossessed homes, Sharga said.

Nevada posted the worst foreclosure rate in the nation, with one in every 54 households receiving a foreclosure-related notice, nearly four times the national rate.

The number of properties with a filing increased 137 percent over the same quarter last year but only rose 3 percent from the fourth quarter.

California had the most properties facing foreclosure at 169,831, an increase of 213 percent from a year earlier. It also posted the second-highest foreclosure rate in the country, with one in every 78 households receiving a foreclosure-related notice.

California metro areas accounted for six of the 10 U.S. metropolitan areas with the highest foreclosure rates in the first quarter, RealtyTrac said.

Many of the areas – including Stockton, Riverside-San Bernardino, Fresno, Sacramento and Bakersfield – are located in inland areas of the state where many first-time buyers overextend themselves financially to buy properties that have plunged in value since the market peak.

"California still hasn't hit bottom," Sharga said. "We have a lot of California homes that are in early stages of default that may not be salvageable because either there's no market or financing available, or both."

Arizona had the third-highest foreclosure rate, with one in every 95 households reporting a foreclosure filing in the quarter. A total of 27,404 homes reported at least one filing, up nearly 245 percent from a year ago and up 45 percent from the last quarter of 2007.

Florida had 87,893 homes reporting at least one foreclosure filing, a 178 percent jump from the first quarter of last year and a 17 percent hike from the fourth quarter last year. That translates into a foreclosure rate of one in every 97 households.

The other states among the top 10 with the highest foreclosure rates were Colorado, Georgia, Michigan, Ohio, Massachusetts and Connecticut.