That's the view of the newly-formed 2020 Group - an alliance of the National Housing Federation (NHF), housing charity Shelter, the Local Government Association (LGA) and the Trades Union Congress (TUC), headed by economist Kate Barker.
Barker said "significant" extra financial investment was needed to keep supply going, support private building and create 100,000 new social homes over the next two years.
"Support for housing today offers excellent value in terms of sustaining economic activity, and reduces the risk of a very severe loss of capacity in the housing and related industries.ADVERTISEMENT
"There is real concern that the present fall in home building is sowing the seeds of the next boom."
"Social housing waiting lists are rising. This package meets a real and urgent need," she added.
David Orr, chief executive of the NHF, said: "Without radical action many people in construction will lose their jobs, and up to five million people could find themselves on housing waiting lists by the end of 2010 - this is the Government's chance to help us to make sure that neither of these things happens."
U.S. home sales rise in December
CBI construction chiefs back council house building plan