NEW YORK (Reuters) – Sales of distressed U.S. homes fell in the first quarter as demand remained weak, but they still made up about 28 percent of total sales, the highest amount in a year, a RealtyTrac report said on Thursday.

Sales of homes owned by banks or in some stage of foreclosure totaled 158,434, down 16.5 percent from the fourth quarter and 35.8 percent from the first quarter of 2010.

Of that total, 107,143 were bank-owned sales and 51,291 were in default or scheduled for auction.  Read more