Figured it out.
1) Create a new page called home, save it.
2) Create a new page template, and name it home.
3) Update the home page to use the home template.
4) Settings > Reading > Select the home page as your front page.
5) Add this code to your home page template to pull the latest post
<?php $recentPosts = new WP_Query(); $recentPosts->query('showposts=1'); ?>
<?php while ($recentPosts->have_posts()) : $recentPosts->the_post(); ?>
<h2><a href="<?php the_permalink();?>"><?php the_title();?></a></h2>
<div id="exerpt"><?php the_excerpt(); ?></div>
<p class="readMore"><a href="<?php the_permalink();?>">more »</a></p>
<?php endwhile; ?>
*Notice this code it set up to only show the excerpt of the latest post (the_excerpt(); and showposts=1).