BOSTON (Bloomberg) - US existing home sales will fall 13 percent this year before recovering in 2009, according to a forecast by the Mortgage Bankers Association, the industry's largest trade group.

Sales of previously owned homes probably will drop to 4.94 million from 5.68 million in 2008 and then increase to 5.12 million next year, the Washington-based group said in yesterday's report. New home sales likely will tumble 15 percent to 666,000 from 2007, before rising 6.6 percent in 2009.

Stricter lending standards are making it harder for people to buy real estate as the US housing slump enters its third year. A "credit crisis" caused by sub-prime losses has depleted the capital of mortgage lenders and hobbled their ability to make new loans, said Doug Duncan, the group's chief economist.

"Banks are running up against capital limits as they write down the value of assets at the same time they are putting loans on their balance sheets because the markets for securitised products are essentially closed," Mr. Duncan said in the report.

Mortgage originations for loans to buy homes will decline 18 percent to $955 billion in 2008, the report said. That is almost half the $1.5 trillion lent in 2005 as the five-year real estate boom peaked. In 2009, purchase originations will rise five percent to $1 trillion, the MBA said.

Loan refinancing will fall about 14 percent to $1 trillion this year from $1.17 trillion in 2007, the forecast said.