RealtyTrac said foreclosure filings, which include default notices, scheduled auctions and bank repossessions, involved 1,361,795 properties in 2013.
The total for the year, the lowest since 2007, is also 53 percent lower than the peak year of 2010, when 2.9 million properties were hit with foreclosure proceedings.
In 2013, one in every 96 U.S. properties or 1.04 percent was hit with at least one foreclosure filing in the year, down from 1.39 percent in 2012 and 2.23 percent in 2010.
While most states had improved foreclosure rates in 2013, there were 10 states with rates that climbed, some of them significantly.
In Maryland, foreclosures rose 117 percent in the year. In New Jersey, the gain from 2012 was 44 percent. In New York, foreclosures increased 34 percent. In Connecticut, the rate jumped 20 percent. These are all states in which foreclosures are required to go through judicial reviews, a process that was stalled due to the "robo-signing" scandal that emerged in mid-2011.
The scandal involved banks hiring so-called foreclosure mills that were accused of cheating homeowners of due process by taking short cuts on paperwork, including having documents signed by people who had not read them.
The scandal skewed foreclosure numbers, as many major banks halted foreclosure processing in states with judicial reviews until they settled legal issues involving the shortcuts. A $26 billion settlement was announced in February 2012, at which point the banks had a backlog of foreclosures on their books.
RealtyTrac said long-term damage to the housing market from the economic downturn, the financial crisis of 2008 and the ensuing recession were enormous.
Including 2013, there have been 10.9 million U.S. properties in which foreclosure proceedings have at least been started and 5.6 million in which properties were repossessed, RealtyTrac said.
"Millions of homeowners are still living in the shadow of the massive foreclosure crisis that the country experienced over the past eight years since the housing price bubble burst -- both in the form of homes lost directly to foreclosure as well as home equity lost as a result of a flood of discounted distressed sales," said Daren Blomquist, vice president at RealtyTrac
The foreclosure crisis, however, is fading, he said.
"But the shadow cast by the foreclosure crisis is shrinking as fewer distressed properties enter foreclosure and properties already in foreclosure are poised to exit in greater numbers in 2014 given the greater numbers of scheduled foreclosure auctions in 2013 in judicial states, which account for the bulk of U.S. foreclosure inventory," Blomquist said in a press release.