Cascade H-bridge (CHB) converters show promising potential across various applications, such as power electronic transformers and static synchronous compensator, because of their advantages such as modularity and the ability to generate multilevel output voltage. However, the DC-link voltage of each CHB module needs to be controlled individually. Imbalanced voltage is, therefore, a serious problem for the stable operation of CHB. In this study, we developed a hybrid modulation strategy for a single-phase CHB rectifier (CHBR) in a power electronic transformer used in the traction industry. In the proposed average voltage selected (AVS) method, the average DC-link voltage value is calculated. All modules whose DC-link voltage is lower than the average are charged, and all modules whose voltage is higher than average are discharged. Furthermore, a duty ratio saturation compensation is used. Compared with previous hybrid modulation strategy with a wide stable operation region, the AVS method can decrease the input current total harmonic distortion (THD) and DC-link voltage THD without sacrificing the stable operation region and switching loss. The effectiveness of the AVS method was verified by simulation and experiments.