I plan on painting the exterior of my house this summer, again. I have had trouble getting the paint to adhere to the cedar siding. It bubbles and peels quickly even though I prepare the siding by sanding and applying exterior primer. Is there something else I should do or is there a type of paint that I should use? I have been using a latex paint.

The problem is water vapor pushing out from the house. Latex tends to be more permeable than oil, so stick with it. There are several approaches. One is to add ventilation to the siding to let the vapor out. Of course, that allows warm air out all winter. The other is to tighten up the walls inside adding vapor barrier. I think Shirwin Williams sells a vapor barrier paint.

I like my solution, vinyl. In 1985, I ripped off the shabby hardboard siding. I put on 1'' foil covered polyamide foam, and then vinyl siding. I also covered the trim with prepainted aluminum. My gas bill held even that year. Everyone else's took a big jump. Haven't touched the outside of the house since and see no reason it will need work in my lifetime.

In order for the paint to bubble, it needs a moisture source.

The sun heats the paint surface and draws the cooler moisture to the surface.

Are you power washing the surface prior to painting?

How much time do you give the exterior walls to dry before painting?

Are you painting AFTER the sun has been on that side of the house?

Is it happening to ALL the walls or just certain ones. Or just sections of certain walls?

If sections, what is on the interior of the house where it blisters on the exteror?

What is above the areas where it peels? Overhang? Do you get ice dams in the winter?

Benjamin Moore makes a latex vapor barrier primer. This may, as LabMan suggests, help with preventing the moisture from coming through.