Retail industry sales growth will shrink to 3.4 percent this year, hampered by the lingering housing slump, a trade group forecasts.

Sales will total $2.53 trillion in 2012 after inflation helped boost growth to a greater-than-projected 4.7 percent last year, the National Retail Federation said. The 10-year average annual growth rate was 3.1 percent, said Ellen Davis, a spokeswoman for the trade group in Washington, D.C.

This year’s expansion will be “incremental, modest,” said Matthew Shay, the trade group’s CEO.

The housing slump is the “biggest drag” on the U.S., he said.

Holiday sales grew a greater-than-predicted 4.1 percent last year, the trade group reported this month. Retailers, including J.C. Penney and Williams-Sonoma, have reduced profit forecasts for the fourth quarter because of the promotions they used to drive those sales.

“The economy is not growing at the pace we would hope,” Shay said. “Consumers are finding a way to get out there and spend. But the consumers are different today. They are much more focused on value. They are much more informed than they ever were.”

Home prices will drop 1 percent in 2012, according to a forecast by Freddie Mac. The housing market has been held back by weak demand because of high unemployment and concerns about job security, Douglas Duncan, Fannie Mae’s chief economist, said this month.