The number of borrowers underwater on their mortgages is below 2 million for the first time since 2006, as rising home prices are improving homeowner equity and creating new lending opportunities, according to Black Knight Financial Services.

"The steady upward trajectory of home prices continues to improve the equity positions of many homeowners," said Ben Graboske, executive vice president of data and analytics at Black Knight Financial Services, in a press release. "This is plainly visible in the number of borrowers who are underwater on their mortgages, owing more than their homes are worth."

"Over the past year, we've seen a 35% decline in the total underwater population, with a 16% decline in that population over the first three months of 2017 alone," he continued. "Home prices rose 2.3% in the first quarter, as compared to 1.8% over the same period last year, helping an additional 350,000 borrowers regain equity in their homes."

The amount of equity available to borrow against has risen by $695 billion among homeowners with at least a 20% equity stake, bringing total lendable equity to just under $5 trillion. If home prices continue to increase at or near their current rate, lendable equity will likely hit record highs by this summer.

The number of underwater borrowers has declined to 1.8 million, and nearly half of these borrowers own homes in the lowest 20% of their respective markets. The nation has a negative equity rate of 3.6%, while the rate among homeowners in that lowest price tier is over 8%, according to Graboske.

"These lowest-price-tier properties are more than twice as likely to be underwater as those in the next price tier up, and 6.5 times more likely to be underwater than those living in the top 20% of the market. This is the highest differential we've seen between high and low price tiers since we began keeping track in 2005," said Graboske.

Some areas face staggering differences in value between the lowest and highest price tiers; in Detroit, borrowers in the lowest 20% of prices are 50 times more likely to be underwater than those in the highest.

More than 40 million Americans now have equity they can borrow against, the largest this population has ever been.

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