New U.S. housing starts in October unexpectedly fell to their lowest level in six months, weighed down by a sharp decline in new construction. Despite or perhaps “to spite” expectations for 600,000 new units, housing starts dropped 10.6 percent to a seasonally adjusted annual rate of 529,000 units, the lowest level since April and the percentage drop was the biggest since January.

Dan Alpert of Westwood Capital tells Tech Ticker that house prices are still too expensive with the large supply of new and old houses:

USA Today reports the medium home price in California was up 7%:

The median home price in California jumped 7% last month from May, as life began to return to the long-sluggish market for high-end homes, a tracking firm said Thursday.

and Calculated Risk reports that housing starts were up:

Privately-owned housing starts in June were at a seasonally adjusted annual rate of 582,000. This is 3.6 percent (±11.3%)* above the revised May estimate of 562,000, but is 46.0 percent (±4.3%) below the June 2008 rate of 1,078,000.

Good news all around, unless one looks for the rest of the story.  Notice the housing starts change was a range of from -7.7% to +14.9%. Hard to find much certainty in that.  Housing starts might be up.  Then, again they might be down…  As far as the medium home price goes, remember that “those who know” have been forecasting that bigger houses were entering foreclosure so that the median home price is expected to rise from that alone – and that’s bad, not good.  Mark Hanson also adds:

Remember, volume precedes price. Mid-to-high end sellers remain unrealistic about the values of their properties — likely because so many owe so much more than the homes are worth. But those with equity that are ok with the past 20-years of price appreciation or who know that they can steal a home in another area are accepting offers this selling season far below list prices. Others are opting for short-sales to which the banks are warming up. With rates down and prices down finally, two years of pent up demand in the mid-to-high end market is manifesting in more transactions. This is having the effect of pushing up median prices.

Don’t get too excited about housing yet…