Probably a hornet's nest. It's doubtful there will be any damage to the house, but a swarm of angry hornets in your yard or, perish the thought, in your house, is no joking matter. There are pros who have the equipment and know-how to get rid of it safely; I suggest you call one. You could as well just leave it be, but if there are children in the house, they are sometimes known to do "adventurous" and ill-advised things.

I agree! Call a professional! These can be very dangerous especially if you have children around. We had hornets actually attack a group of children visiting our garden.

I don't know hornets. Around here we have paper wasps. When I want to get rid of a nest, I wait till dark and using a flashlight I spray the nest with hornet and wasp spray . It shoots a stream 20 feet, so you don't get too close. At night almost all the wasps go into the nest. Only one or two guards are sitting or flying about the nest. I try to spray nest, guards and all wetting thoroughly. The result: all dead. Maybe one or two flying near the nest wondering what happened. Those go away--maybe die.

We get the super shooting 20 hornet and wasp spray too. It has always worked out well. It looks like you have a two story home. It the spray will reach I think it would be pretty safe, but I would not get on a ladder to do it. Just not a quick enough getaway.