a bag of the plastic beads that you use to fill the butts of stuffed animals so they'll sit upright
a needle and corresponding colors of thread
To start with, you'll need to choose your colors, and if you don't have what you need at home already, you'll have to go out and buy some felt. For those of you who've never worked with it before, it comes in 8x10 or 8 1/2 /11 sheets just about anywhere they sell craft supplies. And it's wonderfully cheap, (like sometimes 25 cents a sheet) so making things out of felt can be a very inexpensive hobby if you're strapped for disposable income. So, anyway, you'll need colors for the house itself, the roof, the windows, the shutters, and the door.
Take the pieces for the house part, fold them, and cut them in half. Two sheets of felt will be all you need for four pieces. What I did for the roof was, I cut the sheet in half, and then halved the halves. You'll need the roof pieces for the sides to be triangles that will be the same height as the front and back.
Next, you'll need to make the windows and door. I did this mostly by eye, because I was interested in a less polished look, but you can make a template out of cardstock if you like, and trace it on to the felt.
Now you're going to have to stitch down all those windows, shutters, and the door. As I'm sure you can imagine, it'll take a while. I tried gluing them down first, by using a paintbrush and glue, but that didn't work even a little bit, so it was Needle And Thread Time.
After the windows and door and such are on, start stitching together the sides of the house and roof, leaving an open seam on one part of the roof for filling later.
It'll end up looking something like this:
Next, you need to attach a floor. Measure the width of the sides of the house, and use the measurements to make yourself a square that fits right onto the bottom. Stitch it on, making sure there's no openings anywhere in the seams for anything to fall out, because that's the next step. Dump in the plastic pellets. If you don't have access to plastic pellets specifically made for stuffed animals, you can use rice, or dried field corn, or even rocks. Whatever's going to make the bottom of your house heavy enough to hold open a door. Fill the rest of your house with stuffing, and then stitch up the opening in the roof.
And voila, you're done. If you'd like a more polished look with very flat real-house-like surfaces, line the insides of all the pieces with cardboard (using double sided tape) before you stitch them together.
You can embellish this in infinite ways, which I'm considering going back and doing. You can embroider designs above the windows, add fabric flowers around the bottom, make some cute little felt birds for the roof. You could make it a haunted house by choosing appropriate colors and then cutting out skeletons or ghosts etc to add around the walls. Just some ideas.