Higher mortgage rates, the government shutdown and back-to-school distractions contributed to a modest slowdown in home sales in September.

Statewide sales were 7,125, down 16 percent from August, but up 13 percent from last year, according to the Minnesota Association of Realtors. The median price of those transactions rose 11 percent from last year to $171,425.

The trend was similar nationwide. Sales were down 1.9 percent during September, but were up 10 percent compared with the same month last year, according to the National Association of Realtors. The median price of those sales was $199,200, up 11.7 percent from last year.

Lawrence Yun, the national association's chief economist, said the decline wasn't as much of a surprise as home prices. Values have increased faster than income growth, causing housing affordability to fall to a five-year low.

"Expected rising mortgage interest rates will further lower affordability in upcoming months," he said. "Next month we may see some delays associated with the government shutdown."

In Minnesota, the market has been strongest in large metro regions where job growth has been robust, including the Twin Cities, St. Cloud and Rochester. In the seven-county metro, sales were up 15.5 percent with the median price rising 11 percent to $200,000. And in the Arrowhead region, which includes the Duluth metro, sales nearly doubled.

But sales have been erratic in some rural markets. In the Northwest region, for example, closings were down 46 percent, and in the Upper Minnesota Valley sales were down 27 percent.

Dave Gooden of LakePlace .com, a brokerage that primarily sells lakeshore properties across the state, said second-home sales have improved tremendously. He said lakeshore transactions last month were triple the year before, and that the strongest gains have been in the company's Crosslake, Detroit Lakes and northwestern Wisconsin offices.

"I keep reading all of the positive news about the metro area markets but it doesn't compare to what our company is seeing in the vacation home/recreational real estate market," Gooden said. "It may have something to do with how far the vacation home market fell during the downturn, and it may have something to do with how quickly our brokerage is growing, but either way, the outlook seems to be very, very bright."

Indeed, home sellers have become increasingly active. During September, there was a 14 percent increase in new listings in Minnesota. "We generally see a drop in listings this time of the year primarily due to the absence of school-year-influenced sellers and the reduction of discretionary sellers," said Rod Helm, president of the Minnesota Association of Realtors. "This year-to-year increase is really representative of more sellers looking to take part in the current housing recovery."

Sellers continued receiving more than 96 percent of their list price statewide, and houses are selling faster than they did last year. The average market time last month fell to 48 days, a 22.6 percent decrease since last year.

Interest rates remain near record lows, but have increased nearly a full percentage point since late spring. Freddie Mac said the national average for a 30-year, fixed-rate mortgage rose to 4.49 percent last month. The average rate was 3.47 percent in September 2012.

While rates are likely to rise modestly in coming months, the market is getting a boost from steady declines in foreclosures. On Monday, CoreLogic said foreclosure rates across the country fell to 2.36 percent of all mortgages during August, down from 3.34 percent last year. The same was true in the Twin Cities metro, where the average foreclosure rate was 0.86 percent compared with 1.62 percent last year.

"Minnesota has really made some strides this year on our recovery of the housing market, " said Chris Galler, CEO of the Minnesota Association of Realtors. "However, with mortgage rates slowly ticking up and such uncertainty with our federal government, we could definitely see the pace slow down."

Jim Buchta • 612-673-7376