Nágranni býr í húsi.

Breakdown of Nágranni býr í húsi.

í
in
hús
the house
búa
to live
nágranni
the neighbor
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Questions & Answers about Nágranni býr í húsi.

Why are there no articles like a or the before nágranni and húsi?
Icelandic does not have an indefinite article. Unmarked nouns are indefinite (so nágranni = a neighbor, húsi = a house). Definiteness is shown with suffixes: -inn for masculine singular and -ið for neuter singular. Thus nágranninn = the neighbor, húsið = the house.
How would you say the neighbor lives in the house in Icelandic?
You would say Nágranninn býr í húsinu. Here nágranninn is the definite nominative masculine singular, and húsinu is the definite dative singular of hús.
Why is hús written as húsi in í húsi?
After í expressing location, the noun takes the dative case. hús is a neuter noun; its dative singular form is húsi.
Which case does í govern here, and how do you know?
When í indicates static location (in something), it governs the dative case. When it indicates motion into something (into), it governs the accusative. Example: ég bý í húsi (I live in a house – dative) vs. ég fer í hús (I go into a house – accusative).
What is the verb býr, and how is að búa conjugated?

býr is the 3rd person singular present of að búato live/reside. Present‐tense conjugation: ég bý,
þú býrð,
hann/hún býr,
við búum,
þið búið,
þeir/þær búa.

What gender is nágranni, and how would you refer to a female neighbor?
nágranni is a masculine noun. To refer specifically to a female neighbor, you can use nágrannakona (where kona means woman), although nágranni is often used generically.
How do you pronounce Nágranni býr í húsi?

Roughly:
NÁ-gran-ni (long á like English ow in now, but longer),
býr = BWEER (long ý like ee),
í = short ee,
HOO-si (long ú like oo in food, then short i).
Primary stress is on the first syllable: -gran-ni.