The U.S. negative equity rate fell to 18.8 percent of all homeowners with a mortgage in the first quarter of 2014, representing 9.7 million Americans, according to a new report from real estate portal Zillow. Zillow predicts that the U.S. negative equity rate will fall to 17 percent by the first quarter of 2015.

The market in the Boston metropolitan area did better than the country overall, with negative equity declining to 11.5 percent in the first quarter from 15 percent in the first quarter of 2013. Among the country’s 35 largest metros, Boston had the 7th lowest negative equity rate in the first quarter.

However, Zillow cautioned that the affordable homes most sought after by first-time homebuyers are almost three times more likely to be underwater than the most expensive homes, constraining supply and crimping home sales.

Among all homes with a mortgage nationwide, roughly one in three (30.2 percent) priced within the bottom third of home values were underwater in the first quarter, compared with 18.1 percent of homes in the middle third and 10.7 percent of homes in the top third.

In metro Boston, 21.4 percent of mortgaged homes in the bottom price tier are in negative equity, compared with 7.8 percent in middle tier and 4.3 percent in top tier. The negative equity rate in the Boston metro has fallen 47.8 percent since peaking in the first quarter of 2012.

Buyers and sellers at the lower end of the market tend to rely on accrued home equity in order to cover the down payment of their next purchase. That means that the "effective" negative equity rate, including those homeowners with 20 percent or less equity in their homes, is 36.9 percent, according to Zillow.

 "The unfortunate reality is that housing markets look to be swimming with underwater borrowers for years to come," Zillow Chief Economist Stan Humphries said in a statement. "It’s hard to overstate just how much of a drag on the housing market negative equity really is, especially at the lower end of the market, which represents those homes typically most affordable for first-time buyers. Negative equity constrains inventory, which helps drive home values higher, which in turn makes those homes that are available that much less affordable."

At the end of the first quarter, the number of homes foreclosed nationwide fell to 4.9 homes per 10,000, from 5.4 homes per 10,000 at the same time last year. As foreclosure activity continues to fall, the pace of negative equity improvement will also slow, as homeowners’ debt is wiped from lenders’ books following foreclosure.