Housing Starts dropped -10% in May 2010.

Privately-owned housing starts in May 2010 were at a seasonally adjusted annual rate of 593,000. This is 10.0 percent below the revised April 2010 estimate of 659,000.

The below St. Louis Fred graph is the percentage change in single units for new housing starts. Single family housing starts dropped -17.2% in one month!

Building permits are in the tank as well with an overall drop of -5.9% and in single family residential, a drop of -9.9%. Below is a graph of building permits, or new authorizations to construct, starting from 1960. Think about the overall population growth since 1960...

Below are building permits for just single family residential, from January 2005.

As always the uber source for housing data is Calculated Risk.

A drop was expected, just not this big, because the housing tax credit expired. According to Market Watch, this is the largest percentage drop since 1991.

Housing starts means what it sounds like, the number of new homes where construction has started. There is a lot of statistical error in housing starts and permits, which is outlined in the report. Note the single family starts and permits numbers are outside the statistical error range, so don't think this is just bad data somewhere.