Well it shouldn’t necessarily come as a surprise. Sales of previously owned homes fell 1.9% in September from a month earlier, according to the National Association of Realtors, as the summertime spike in mortgage rates pressured activity and housing affordability decreased.

“Affordability has fallen to a five-year low as home price increases easily outpaced income growth,” says Lawrence Yun, the National Association of Realtors’ chief economist. “Expected rising mortgage interest rates will further lower affordability in upcoming months.”

The annual pace of existing home sales slipped to 5.29 million, in line with economists’ expectations. NAR also downwardly revised its August estimate to 5.39 million, meaning activity was closer to a near-four-year high rather than the six-and-a-half-year high initially reported by NAR.

Still, September existing home sales are 10.7% higher than a year ago and activity has remained higher than year-ago levels for a consecutive 27 months now.

Mortgage rates have jumped since May, when speculation about the Federal Reserve’s plan to taper its $85-billion-per-month bond-buying program first caused investors to begin selling out of U.S. Treasuries. Though rates have come off some since mid-summer, 30-year fixed rate loans still averaged 4.28% last week, according to Freddie Mac , versus 3.37% a year ago.

Despite the decrease in sales activity, homes continue to trade at prices higher than a year ago. Nationally, the median existing-home price in September was $199,200 — an 11.7% yearly jump. NAR notes that median prices have climbed at double-digit year-over-year rates for 10 straight months now. Higher prices have bitten into affordability levels as well.

The Realtors chalk rising prices up to still-tight inventory levels. Total TOT +0.23% housing inventory, comprised of single-family homes, condos, townhomes and co-ops, remained unchanged in September with 2.2 million existing homes listed for sale. At the current pace, that represents a 5-month supply; a healthy market is typically comprised of a six-month supply.

Since sales of existing homes can take up to two months to close, September’s report reflects the effects rising mortgage rates and home prices have been having on prospective buyers.

Yun expects the 16-day government shutdown to impact sales data come October. NAR president Gary Thomas adds that, thanks to the IRS being shuttered during the shutdown, delays in tax transcripts needed for approval of mortgage loans could “negatively impact sales closings” next month.

Another concern will be flood insurance rates, which were set to rise on October 1. With an estimated one in 10 pending sales located in flood zones, those increased rates could translate into delayed or cancelled deals, warns Thomas.

Economists have been closely watching the housing market to see how these factors, particularly rising rates, are impacting the recovery. The biggest effect thus far has been an emerging slowdown in the rate of home price growth.

Seattle-based real estate site Zillow Z +0.72% recently found that the pace of home value appreciation slowed in the third quarter. Nationally, home values rose 6.4% during the three months ending in September from a year earlier and only 1.2% over the second quarter — only half the appreciation rate experienced in the second quarter versus the first.

Zillow also found that half of the 30 largest metro areas it covers posted negative monthly appreciation at the end of September; as recently as July, all 30 metro areas had clocked positive monthly appreciation.

Signs that declining affordability is beginning to slow price growth are beginning to show up in the S&P/Case-Shiller Home Price Indexes as well. Last month, S&P Dow Jones’ Index Committee chairman David Blitzer noted that, “More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked.”

The median existing home price also points to this trend. Despite a hefty 11.7% year-over-year increase, NAR’S September estimate is 5% lower than $209,700 logged in August.

Still, economists are quick to stress that none of this means the housing recovery is in danger of being derailed. “Far from being a negative sign, we’re relieved to see more noticeable signs of cooling in the market,” noted Zillow chief economist Stan Humphries in the report. “If home values continued to rise as they have, relatively unchecked, we would almost certainly be headed into another bubble cycle, and nobody wants that.”

And while housing is starting to become more expensive, it’s still attractive, according to Fitch Ratings. Fitch projects that 2013 will clock a 17% increase in single-family housing starts, a 205 increase in new home sales, and a 8.5% increase in existing home sales. And the agency predicts similar growth in 2014, with total new home starts increasing 16.5% to 1.1 million for the year thanks to an anticipated 20% gain in single family construction and a 9% gain in multifamily. It expects new home sales to improve 20% in 2014 while existing home sales “moderate” to 5%.

“Recent government struggles, negative equity and challenging mortgage qualification standards appear to be little more than short-term headwinds restraining the housing recovery,” asserts Fitch Ratings managing director Robert Curran.