The Energy Commission's new regulations focus primarily on two areas--a home's duct system and windows. In one of the options under the new rules, which go into effect in June, the ducts could be sealed even more tightly than they are today and as a result, less than 6% of the hot or cold air produced by the heater or air conditioner would be lost before it reaches the room vents.

"In all, the new standards are expected to make new homes between 12% and 15% more energy-efficient," says Robert Rivinius, CEO for the California Home Building Industry Association, a statewide trade association representing more than 6,000 homebuilders, remodelers, subcontractors, architects, engineers, designers and other industry professionals.

To keep costs from escalating--California is home of nine of the 10 least affordable housing markets in the nation--builders are working at the state and national levels to expand tax credits and energy-efficiency programs aimed at homeowners.