With the economy on the mend and housing prices on the rise, foreclosure sales in the state have fallen to the lowest level since the beginning of the housing crisis.

Statewide there were 6,795 foreclosure sales during the first half of the year, a 29 percent annual decline and the least since 2006, according to the Minnesota Homeownership Center.

“Modest improvements in Minnesota’s economy and increasing home prices, combined with improvements in how banks and lenders deal with struggling homeowners, are positively impacting the number of homes lost to foreclosure,” said Ed Nelson, communications manager for the Minnesota Homeownership Center.

The report provides evidence of the strong correlation between jobs and the housing recovery. The Homeownership Center, which uses filing data collected in every corner of the state by HousingLink Minnesota, said the biggest declines in foreclosure rates were in the Twin Cities metro area, which saw a 33 percent drop from 2012. Home sales in the Twin Cities metro have risen at a double-digit pace for nearly two years.

In outstate Minnesota, where the housing recovery has been more uneven, foreclosure sales were down only 23 percent. Those regions that have struggled the most are rural communities that have yet to see any job growth, economic recovery or demand for housing.

“Housing price increases have helped many return to a positive equity position,” said Chris Galler, chief executive officer of the Minnesota Association of Realtors. “Those who are having trouble meeting their payments are having a much easier time selling their property before it falls into foreclosure.”

Also on Thursday, Realty­Trac, a national research firm, said foreclosure actions nationwide climbed almost 2 percent from June to July. Those filings, including default notices, scheduled auctions and bank repossessions, were reported on 130,888 U.S. properties in July, an increase from the 78-month low in June but a 32 percent decline from July 2012.

Daren Blomquist, vice president of RealtyTrac, attributed that blip to a growing backlog of troublesome mortgages in states that have adopted a more lengthy judicial foreclosure process. That includes Florida, among the 10 states with the nation’s highest foreclosure rates. “While foreclosures are continuing to boil over in a select group of markets where state legislation and court rulings kept a lid on foreclosure activity during the worst of the housing crisis, the foreclosure boil-over markets are becoming fewer and farther between,” Blomquist said.

The report shows that one in every 1,001 U.S. housing units received a foreclosure filing during the month compared with one in 999 households in the Twin Cities.

Across the state, more than 1,100 homes each month were lost to foreclosure during the first half of the year, which pales in comparison to 2010, when Minnesota was in the midst of the worst of the housing collapse since the Great Depression. During the first half of 2010, lenders auctioned off more than 2,100 homes each month.

“The most recent data is encouraging, but we can’t lose sight of the fact homes are still being lost to foreclosure at rates that exceed twice those of historic levels,” said Nelson.

Aaron Dickinson, broker associate at Edina Realty, said that in the metro area, foreclosures and short sales have historically represented less than 5 percent of all Twin Cities market activity. Those distressed sales now represent about 20 percent of all deals, down from 45 percent just two years ago.

Dickinson expects those foreclosures and short sales to return to historical norms within two years, assuming that mortgage rates remain low and the economy continues to improve.

“As the economy continues to recover, it’s clear that foreclosure activity will continue to wane,” he said. “The continued decline of mortgage delinquencies, pre-foreclosures and eventual sheriff sales is great news for the housing market and Minnesota families.”