My home button on my Ipod 5th generation isn't working, whats going on?

Try and calibrate Home Button

1. Open a stock application like Calendar, Weather or Youtube

2. Hold down the power button until the "slide to power off" control appears

3. As soon as you see it, press the Home button and keep it pressed until the red slider disappears and the app is forced quit to the Home menu

make an appointment at the Genius Bar of an Apple store since it appears you have a hardware problem.If your iPod is defective Apple will exchange it for another at not cost unless the iPod has been abused..

Apple Retail Store - Genius Bar