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The number of homeowners who were underwater on their mortgages fell to a new low in the first quarter of the year as ongoing price increases boosted equity by nearly $64,000 per borrower nationwide.

That’s according to the latest Homeowner Equity Report from the real estate data and analytics firm CoreLogic, which was released Thursday.

Homeowners gained a collective $3.8 trillion in equity from the same time a year ago, the report said. California, Hawaii and Washington led the nation in equity growth, where homeowners gained more than $100,000 year-over-year.

Equity rose 32.2 percent compared to the same time in 2021 for homeowners with a mortgage, which accounts for nearly two-thirds of properties nationwide.

“Price growth is the key ingredient for the creation of home equity wealth,” said Patrick Dodd, president and CEO at CoreLogic. “Home prices were up by 20 percent in March compared to one year earlier in CoreLogic’s national Home Price Index. This has led to the largest one-year gain in average home equity wealth for owners and is expected to spur a record amount of home-improvement spending this year.”

Just 2 percent of homeowners — or 1.1 million homes — with a mortgages are underwater, meaning they owe more than their homes are worth. That’s a 5.3 percent drop from the final three months of 2021 and down 23 percent compared to the first quarter of last year.

Average price growth of about 20 percent allowed 62,000 more people to regain equity.

The report projects that borrowers, who are within 5 percent negative equity, are likely to move out of or into negative equity depending on what happens in a shifting market.

“Looking at the first quarter of 2022 book of mortgages, if home prices increase by 5 percent, 130,000 homes would regain equity,” the report said. “If home prices decline by 5 percent, 167,000 properties would fall underwater.”

Email Taylor Anderson