By Andrew Khouri
January 21, 2014, 1:19 p.m.

A report released Tuesday has found that new California foreclosure filings plunged at the end of last year, as a rebounding economy and higher home prices further healed the housing market.

Notices of default — the first formal step in the state’s foreclosure process — dropped 10.8% in the fourth quarter of 2013, compared with the prior quarter, and tumbled 52.6% from the same period a year earlier, research firm DataQuick said. The 18,120 default notices filed against home owners was the lowest level since the fourth quarter of 2005.

“Most of the drop is because of the improving economy and the increase in home values. Fewer people are behind on their mortgage payments. And of those who do get into trouble, many, if not most, can sell and pay off what they owe,” DataQuick President John Walsh said in a statement.

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