NEW YORK (Bloomberg) — Sales of existing homes in the US probably fell in December, capping the biggest yearly slump in almost a generation, economists said before a report this week.

Purchases fell one percent last month to a 4.95 million rate, the fewest since comparable records began in 1999, according to the median forecast in a Bloomberg News survey ahead of the National Association of Realtors' report due on January 24.

Falling property values and tougher borrowing rules will lead to more foreclosures and keep the real-estate market in recession for most of this year, economists said. A housing-related slump in consumer spending poses the biggest risk to the economic expansion in coming months.

"We're still on the way down in housing," said Ellen Zentner, an economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. "The first half of the year is going to be crucial to determining whether we have a recession."

Sales of existing homes probably dropped 13 percent last year, the most since 1989, according to a forecast by the real-estate agents group.