Inclement weather might be the reason. But building permits pick up.

The housing market continued to suffer at the end of 2009, with housing starts falling 4% to an annual rate of 557,000 in December, the Commerce Department reported this morning.

Economists were expecting starts to come in at a rate of 580,000. November's pace was revised higher, to 580,000 from a previously reported 574,000.

"We expect that inclement weather may have played a role in depressing single-family starts during the month and are therefore willing to partly discount the weaker-than-expected result," Nomura Securities economist Zach Pandl wrote in a note to clients this morning.

Starts for single-family homes fell 6.9% in December to an annual rate of 456,000 units, while starts for multifamily homes rose 12.2% to a 101,000-unit annual pace.

Housing starts were up 0.2% from the 556,000 rate seen in December 2008 -- the first year-over-year gain since the beginning of 2006.

For all of 2009, starts were down 39% from 2008 to about 554,000, the lowest on record. Starts of single-family homes dropped 29% to a record-low 444,000 last year.

Starts are down about 75% from the peak in 2006.

There was some good news on the building-permit front, however. New building permits, which are a key gauge of future home construction, rose 10.9% in December to 653,000, the highest since October 2008. Economists had expected 590,000 units last month.

Building permits for single-family homes rose 8.3% to a seasonally adjusted annual rate of 508,000, the highest in 15 months.

Permits fell 36.9% for all of 2009.