A new Arizona State University real-estate report shows home foreclosures may be leveling off, but the author says it’s unclear if the trend will continue because of the number of defaults and late payments still plaguing the market.

Foreclosures were 33 percent of the market’s recorded activity in May, down from 40 percent in March, according to the latest realty-studies report.

The question remains whether the drop is a simply a blip, said Jay Butler, an associate professor of real estate who authors the study.

“We’re sort of at a break point,” Butler said. “Are we now going to see foreclosures decline, or is it simply for other reasons this is just a respite and we’re going to see an increase? Because we’ve not been here before, it’s hard to say which fork in the road we’re going to take.”

A number of issues will continue to affect the real-estate market, he said. Defaults and late payments remain at record levels, and they could be a precursor to additional foreclosures. Income may not increase enough for people to hold on to their current homes, especially if they are confronted with a change in an adjustable-rate mortgage that could reset in coming months, Butler said.

And he worries that this time of year may cause many people with high debt to walk away from homes with declining neighborhood values.

“A lot of people are looking at the end of school for their kids as a key point,” Butler said. “If they had gotten foreclosed on a few months ago, they would have had to leave and take the kids to another school. Now, they can easily move the kids, maybe without losing face or explaining everything, and move to another area.”

Arizona’s pending immigration law may also hurt the market, Butler said.

Still, there are some bright spots.

The number of new foreclosure filings against Phoenix-area homeowners fell in May to the lowest level since July 2008, according to the Information Market. Foreclosures also dropped last month to 4,090, their lowest since November 2009, the report said.

Butler’s research shows that, as a total, foreclosures added together with the sales of previously foreclosed-on properties still represented 60 percent of the recorded activity in the Valley housing market in May.

For the past year, about 42 percent of the traditional sales were foreclosure homes sold again with a median markdown of 15 percent from the foreclosure price, he said.

More than 3,200 single-family homes in the Valley were foreclosed on during May of this year. That’s down from almost 3,500 foreclosures in April but up from slightly more than 3,000 in May of last year.