TORONTO - Midwinter keeps growing bleaker for the Canadian economy, with the number of home resales in January sagging 40.9 per cent below a year earlier.

National average prices dropped 11.3 per cent year-over-year, according to Canadian Real Estate Association data released Friday.

The association said seasonally adjusted sales through the Multiple Listing Service were down 3.1 per cent from December.

"In seasonally adjusted terms, sales ... now stand at the lowest level since the mid-1990s and barely half the heated pace seen in early 2007," BMO Capital Markets economist Douglas Porter commented after the CREA release.

"While another particularly harsh winter may have played a small role in the dismal sales figures, there is little doubt that Canadians are hunkering down amid widespread job losses and sagging consumer confidence."

The realtors group noted that the pace of seasonally adjusted monthly price declines eased in December and January compared with steep month-to-month tumbles of 14.9 per cent in October and 11.8 per cent in November.

It also said that adjusted for weather and other factors January's year-over-year volume decline was 37.3 per cent, while the adjusted price slump was 6.2 per cent.

The 11.3 per cent unadjusted national price decline was "skewed lower in large part by fewer sales in British Columbia, Alberta and Ontario, where homes are more expensive and demand has softened most," the association stated.

By contrast, it said average prices were up from a year ago in Montreal and Ottawa, as well as in St. John's, N.L.; Halifax-Dartmouth; Quebec City; Regina; Saskatoon; Saguenay, Que.; Oshawa, Ont; Winnipeg; and Thunder Bay, Ont.

The national seasonally adjusted dollar volume of $7.4 billion was the lowest since May 2003.

As sales eroded, the number of listings also receded, posting the sharpest year-over-year decline on record, down 14.2 per cent from January 2008.

"The decline in supply to meet lower demand is expected to help stabilize the resale housing market balance and put a floor under prices," CREA said.

BMO's Porter was less sanguine. "The ongoing sharp drop in home sales points to further declines in prices as well as a deeper pullback in new home building," he wrote.

"The deepening recession, which began in earnest among exporters, is now more forcefully dragging down the domestic side of the economy."

Friday's home-sales tally extended a dismaying series of downbeat economic reports.

A week earlier, Statistics Canada reported 129,000 jobs were lost in December, prodding unemployment to a four-year high of 7.2 per cent, a rate that is expected to rise.

Bankruptcy filings in December were up almost 47 per cent from a year earlier, the Office of the Superintendent of Bankruptcy said Monday.

The same day, Canada Mortgage and Housing Corp. said housing starts in January fell 10.9 per cent from December to the slowest pace since 2001.

And Statistics Canada reported Wednesday that the country had its first monthly trade deficit since 1976 in December, as the global economic slowdown hammered both the prices and the volumes of exports.