The demand for both houses to buy and rented accommodation must be met, Gordon Brown has urged.
He told a Labour policy forum he had seen young children suffering because of sub-standard accommodation and young couples unable to buy their first home.
Local authorities and housing associations would have a "larger role" under plans to be unveiled, he said.
He also spoke of education and health plans - key issues in his parliamentary programme for the next year.
"We know there is a housing problem in our country that has got to be dealt with," he told the meeting at Heathrow.
Speaking at his first Labour National Policy Forum since becoming prime minister last month, Mr Brown said Britain's housing problems were evident when he went round the country in the last few weeks and during the last general election campaign.
He said he met young couples unable to buy their first home, people living in rented accommodation in overcrowded conditions and "young children particularly suffering because of sub-standard accommodation".
Mr Brown announced last week that in total three million new homes would be built by 2020 - up 250,000 from the previous plan.
'Win the argument'
He said Housing Minister Yvette Cooper would unveil proposals in the next few days, including that more money was to be put into rented accommodation.
Those wanting to buy a house should be able to, Mr Brown said
Mr Brown said the Labour government in the 1920s and 1930s had decided to build "millions of houses" and during the 1940s and 1950s many new homes were also built because there was insufficient accommodation.
"Now again we are going to have to decide as a nation and win the argument with people who do not want that sort of development," he said.
He said sufficient homes must be built so that young families, people not in proper accommodation and those who wanted the chance to get on the housing ladder "can get the chance to do so".
The theme of "opportunity" was central to Mr Brown's wide-ranging speech, and he gave more details of plans for the health service and education.
"This is a government that is in the service of opportunity on behalf of all people and not just some in our country," he said.
Mr Brown also announced that unemployed people would be matched up with thousands of job vacancies.
He had signed up firms in the retail, financial services and hospitality sectors who were committed to finding employment in what he called the next stage of Labour's New Deal.
The prime minister said everybody would be given the opportunity to work.
"Our task is to match those people who want jobs and want opportunities with the vacancies and the jobs that are available," he said.
Mr Brown also said the "challenge of terrorism and security" which faced Britain would be met, and "winning hearts and minds" of people would be key to this.
He also praised and thanked Home Secretary Jacqui Smith for the way she dealt with the suspected bomb attempts in London and Scotland shortly after she took up her new role.
Mr Brown also spoke of the need to meet the challenges of climate change, global economic competition and the need for stronger local communities.