Housing starts dropped 7.4 percent last month, the Commerce Department reported yesterday, with all the decline coming in apartments as the Senate debated a tax revision bill that would eliminate many benefits now attracting investment capital to multifamily construction.

Work on apartment buildings plummeted 22 percent from April to May, while the single-family-home figure remained unchanged, the department said. High vacancy rates also were a factor in the multifamily construction decline, analysts said.

The drop in May to an annual rate of 1.8 million housing construction starts of all types came after a 4.1 percent rise in April that had boosted the annual rate to 2.03 million units. The May figure was the lowest level since last December.

Despite the decline, the housing industry is still one of the healthiest sectors of the economy. Construction of of single-family homes fueled by declining interest rates, has held steady at an annual rate of 1.2 million units since February.

"The housing boom is clearly not over," said White House spokesman Larry Speakes. "With mortgage rates still at a relatively low level, we expect the housing industry to continue its strong performance."

Speakes said the administration was not surprised at the "easing" in housing starts "after the extraordinary gains of the first four months" of this year.

"Expectations that the tax reform bill will pass" probably scared many investors away from multifamily construction, said Lyle E. Gramley, chief economist of the Mortgage Bankers Association of America. The measure now before the Senate would sharply limit tax shelters that have lured billions of dollars into construction in recent years. The House passed a bill late last year containing limitations on deductibility of interest and changing the depreciation period on property to 30 years, but it is otherwise much less severe than the Senate's.

Economists said in addition to investors' tax fears, vacancy rates are running at relatively high levels in apartment projects throughout the nation. During the first quarter of 1986, vacancies stood at 6.9 percent nationally, a small increase from a year earlier, but landlords in the South reported 9.5 percent of their apartments were empty. Vacancy rates at the end of March were 6.6 percent in the Midwest, 6.4 percent in the West and 3.9 percent in the Northeast, according to Gramley.

Nearly all the decline in multifamily starts, however, came in the Northeast and Midwest, two of the areas where vacancy rates were lowest, indicating investor tax concerns were a much bigger factor in the lagging construction, said Kenneth T. Rosen, manager of real estate research for Salomon Brothers, a large investment house.

Rosen predicted that multifamily construction starts for the entire year would be about 625,000, lower than predicted, and that the number would drop to 475,000 starts in 1987 as the effects of the tax law are felt.

The number of construction permits issued, an indicator of future construction activity, dropped by 5 percent from April to May, to an annual rate of 1.7 million units, according to the Commerce Department report. Multifamily permits declined by 10 percent and single-family permits by 4 percent, the report said.

Home buyers are "somewhat more cautious now" that interest rates have risen slightly, said David S. Seiders, chief economist of the National Association of Home Builders.