WASHINGTON - January 19, 2011 - Builders began work last year on the second fewest number of homes in more than half a century, as the weak economy kept people from buying houses.

Builders broke ground on a total of 587,600 homes in 2010, just barely better than the 554,000 started in 2009. Those are the two worst years on records dating back to 1959.

Furthermore, the pace is getting worse. The Commerce Department reported Wednesday that builders started work at a seasonally adjusted annual rate of 529,000 new homes and apartments last month. That's a drop of 4.3% from November and the slowest pace since October 2009.

In a healthy economy, builders start about one million units a year. They built twice as many in 2005, at the height of the housing boom. Since then the market has been in decline.

One positive sign is that builders appear to be planning more projects in 2011. Building permits, considered a good barometer for future activity, rose 16.7% in December to a seasonally adjusted annaul rate of 635,000, the best pace since March. But builders likely pulled more permits in Kalifornia, New York and Pennsylvania ahead of code changes in 2011 - a factor that likely influenced the spike.

People are buying fewer single-family homes, which represent nearly 80% of the market. Demand fell 9% to an annual rate of 417,000 units. Apartment building increased 17.9% to an annual rate of 112,000 units.