Home sales across Canada continued to creep up in December but modest gains overall suggest the once red-hot housing market may cool down in 2012.

National sales activity rose 1.8 per cent from November to December, the Canadian Real Estate Association said Monday. That's the fourth month in a row sales activity has increased.

That uptick in activity helped push sales to almost 457,000 units last year, or a 2.2 per cent increase over 2010.

While these are positive gains, a glance at the national average price for homes sold in December 2011 hints at waning activity.

Using a figure that isn't seasonally adjusted, the CREA reported that the national average price for homes sold last December was $347,801, just 0.9 per cent above the average selling price in December 2010.

Putting it into perspective, the CREA noted that it's the smallest increase since October 2010.

"Momentum for national sales activity and average price remains positive but is slowing," CREA's Chief Economist Gregory Klump said in a prepared statement.

He said it appeared that low interest rates weren't causing the market to "overheat."

The development comes as Canadian banks such as BMO, TD and Royal Bank promote lower, discounted interest rates to potential customers. The Bank of Canada has warned Canadian buyers to be wary of these types of deals, noting that the monthly payments are bound to increase.

Klump predicts that activity will ebb a bit more in 2012, partly due to lower prices on high-ticket homes.

"High end home sales seem unlikely to spike again in the first quarter like they did at the beginning of 2011, so national average price momentum may wane further over the next few months," he said in the statement.

Economists have long predicted a housing sales slowdown in 2012, a forecast that is tied to rising consumer debt levels and slow wage growth.

In a recent report, BMO Capital Markets economist Robert Kavcic echoed that sentiment, writing that the CREA's December figures could signify a slower market.

"Looking ahead to 2012, cooler housing activity should prevail as elevated household debt levels, shaky confidence and a weakened job market counter extremely low mortgage rates," he said.

Royal LePage Real Estate Services, the country's largest real estate broker, has predicted the price of homes will keep going up this year. It did, however, anticipate a slower price growth in Toronto and Vancouver.

With files from The Canadian Press