It's possible by finding a good spot and with lots of patience you can manage something nice such as
this but it takes a lot of effort and there's only so many places like that on mountains where that's possible and you may have to consider future expansion as well.
If there was a capability to flatten mountain/rock terrain (such as chipping with a pickaxe) I'd be fine with that but I also don't think it's the intention for mountains to be a flatten-able terrain. If you could flatten them it would mean you could remove the cliffs as well which would kind of defeat the purpose of a mountain I guess. But it's not just houses you build on them, there's issues with walls, idols and even roads.
Last edited by Kaios on Mon Aug 22, 2016 10:55 pm, edited 1 time in total.