Foreclosure properties accounted for 26 percent of total home sales in 2010, according to RealtyTrac.
The foreclosure listing company said that share was down from 29 percent a year earlier, but up from 23 percent in 2008.
The report also revealed that the average sales price of foreclosure properties was more than 28 percent below the average sales price of properties not in the foreclosure process.
The discount was up slightly from 27 percent in 2009 and 22 percent in 2008.
A total of 831,574 U.S. residential properties owned by banks and mortgage lenders or in some stage of foreclosure sold to third parties last year, down 31 percent from 2009 and nearly 14 percent lower than 2008.
However, sales volume of non-foreclosed properties decreased nearly 19 percent in 2010 and roughly 27 percent from 2008.
As a result, fourth quarter foreclosure sales volume hit its lowest point since the first quarter of 2008.
But foreclosure sales are expected to accelerate this year, which should reduce some of the inventory overhang, while putting downward pressure on home prices.
Nevada led the nation in distressed sales with a staggering 57 percent share – Arizona and California weren’t far behind, at 49 percent and 44 percent, respectively.