The recession continued to take its toll as more  families with children became homeless for the  second straight year, a U.S. government report  shows. -- The number of families in homeless shelters  increased 7% to 170,129 from fiscal year 2008  through fiscal year 2009, a report released today by  the U.S. Department of Housing and Urban  Development found. At the same time, the overall  number of homeless people in shelters fell 2% to  1.56 million.  "As the nation's housing and job markets show  encouraging signs of recovery, there are still far too  many families who are on the brink of becoming  homeless or have fallen into our shelter system,"  Secretary Shaun Donovan said in a statement.

The annual report counted the homeless in two  ways. The first was a census in cities and counties,  where volunteers fanned out one night during the  last week in January to count those living on streets  and in shelters. That count found 643,000 people  were homeless. The chronically homeless dropped  10% from 2008 to 111,000.  That decline stems from more local and federal  efforts to find the chronically homeless permanent  housing and social services, said Nan Roman of the  National Alliance to End Homelessness.  The second method of counting involved a year-  long study of shelter data in 334 communities. It  found more families in shelters rented or lived with  family before becoming homeless. Families also are  staying longer in shelters, from 30 days in 2008 to  36 in 2009.  A 2008 study by the Alliance found 800,000  families were living with extended family, friends or  other people because of the economy.  "Probably those are the families that were becoming  homeless in 2009," Roman said.  Dennis Culhane, a University of Pennsylvania  professor who studies homelessness and is one of  the researchers of the report, said he expects  homelessness to drop in 2010, reflecting in part the  $1.5 billion in federal stimulus money spent by  communities to prevent homelessness.  In New York City, the report found that 30% of  homeless families in 2009 were first-time homeless.  Family homelessness declined this year as the city  gave more rent subsidies and helped parents find  jobs, said Seth Diamond, commissioner of the city's  Department of Homeless Services. There were 8,348  homeless families in city shelters in May, down 7%  from October, he said.