* U.S. housing sector to stabilize during the summer

* U.S. retail sector to recover, but spending lower

By Ilaina Jonas

LAS VEGAS, May 18 (Reuters) - The U.S. housing market that has badly deteriorated in the past three years will stabilize this summer and the United States will be the first economy to rebound, Real Estate mogul Sam Zell said on Monday.

"Housing market stability will appear sometime this summer," Zell said, speaking before more than 2,000 people attending a luncheon at the International Council of Shopping Centers' annual convention in Las Vegas. "I can't tell you if it's June 29 or Aug. 1."

The dearth of new supply should help the housing market find a bottom, Zell said. U.S. home builders have been forced to severely scale back on new homes, to an estimated 350,000 this year at current construction rates from 1.7 million in 2006.

Zell made a fortune in commercial real estate by buying up distressed property in the early 1990s during a deep downturn in the U.S. commercial property sector.

In 2007, he personally reaped roughly $2 billion when he sold Equity Office Properties Trust to Blackstone Group for about $23 billion. That sale is seen by many real estate investors as the top of the U.S. commercial real estate boom.

Since then, U.S. commercial real estate prices have fallen about 15 percent to 20 percent and are expected decline by similar amount before bottoming out. The frozen credit markets have made valuing U.S. commercial real estate difficult because the lack of funding for debt financing has resulted in very few sales.