TORONTO (Reuters) - Home resales in Canada will decline more than previously thought this year due to weaker than expected activity in the third quarter, the Canadian Real Estate Association said on Friday.

The industry group, representing more than 99,000 real estate agents across the country, said it now expects 442,200 sales in 2010, a year-on-year decline of 4.9 percent.

In July it forecast sales would drop 1.2 percent this year.

The association also lowered its forecast slightly for the average home resale price this year. It now forecasts the average price will be C$330,200 ($330,200), a 3.1 percent rise from 2009. In July it forecast C$331,600. The group expects price gains in all provinces.

It said the resale market was more balanced in September, the latest available data, as it cooled from the surge that had helped draw the Canadian economy out of recession last year and early this year.