Wasp and Vinyl Siding

The source of the problem: That small gap between the "J" channels of your home's siding and the vinyl siding sheet itself.  This small gap forms a wonderful, attractive, home for paper wasps and other insects.  The south facing side of your home gets very warm during the day and stores heat into the night.  Wasps just seem to find this ideal for their home! 
Don't blame your home builder, each piece of siding must be installed with a proper expansion gap at each end, typically 1/4".  Here is a link to the Vinyl Siding institute: http://www.vinylsiding.org/, they have an excellent PDF document providing many details about vinyl siding installation: Vinyl Siding Installation.  On hot sunny days your siding may expand quite a bit and without the gap would buckle!  Unfortunately the wasps get the benefit.
A simple long- term solution is to seal and caulk openings from the outside. Recommended products to spray around the entry points during the fall before the wasps have a chance to over-winter inside would be :
Cyzmic CS or Demon WP sprayed in that area.