In May, distressed sales accounted were 8.4% of all sales, according to CoreLogic's Molly Boesel.

Within the distressed category, REO sales accounted for 5.4 percent and short sales accounted for 3 percent of total home sales in May 2016. The REO sales share was 1.7 percentage points below the May 2015 share and is the lowest for the month of May since 2007.

Distressed sales also continued to fall in individual states.

All but eight states recorded lower distressed sales shares in May 2016 compared with a year earlier. Maryland had the largest share of distressed sales of any state at 19.4 percent in May 2016, followed by Connecticut (18.5 percent), Michigan (17.8 percent), Illinois (16 percent) and Florida (15.8 percent).

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