* Starts are seen at 160,250 units for 2009

* Would be first time below 200,000 in seven years

* Existing home sales, prices also seen falling

* Slight rebound seen in 2010

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By Ka Yan Ng

TORONTO, Feb 19 (Reuters) - New home construction in Canada is expected to drop by 24 percent this year as part of the fallout from a slowing economy, but rebound in 2010, the Canada Mortgage and Housing Corp forecast on Thursday.

Housing starts are seen to be about 160,250 units for 2009, down sharply from 211,056 units in 2008, the country's national housing agency said in its first-quarter Housing Market Outlook report.

The forecast was revised lower from its the fourth-quarter outlook, which predicted in October that Canadian home building would slip to 177,975 units this year.