Við göngum kringum húsið.

Here við means we.

That is a very common point of confusion, because við can also be a preposition in Icelandic, often meaning things like with, by, or against, depending on context.

In this sentence, it is clearly the pronoun we, because it comes before a plural verb:

• Við göngum = We walk / We are walking

So the structure tells you which við it is.

Göngum is the 1st person plural present tense form of the verb að ganga.

So:

• að ganga = to walk
• við göngum = we walk / we are walking

A few present-tense forms of að ganga are:

• ég geng = I walk
• þú gengur = you walk
• við göngum = we walk
• þeir ganga = they walk

So göngum is the form that matches við.

This happens because of u-umlaut, a very common sound change in Icelandic.

The short version is:

• the verb stem has a
• when a u appears in the following syllable, that a often changes to ö

So historically and grammatically, gang- becomes göng- before the -um ending:

• gang + um → göngum

This kind of vowel change is extremely common in Icelandic, so it is worth getting used to early.

It can mean either one, depending on context.

The Icelandic present tense often covers both:

• we walk around the house
• we are walking around the house

If you want to be very explicit about an action happening right now, Icelandic often uses vera að + infinitive:

• Við erum að ganga kringum húsið = We are walking around the house

So your sentence is perfectly fine, but context decides whether it feels more general or more immediate.

Kringum means around.

In this sentence:

• kringum húsið = around the house

It is a preposition, and it tells you the movement or position in relation to something.

So the sentence breaks down as:

• Við = we
• göngum = walk / are walking
• kringum húsið = around the house

Kringum takes the accusative.

So the noun after it must be in the accusative case:

• kringum húsið

This is something you will need to learn with Icelandic prepositions: many of them regularly require a specific case.

Húsið means the house.

The base noun is:

• hús = house

Then Icelandic adds the definite article to the end of the noun:

• húsið = the house

So unlike English, Icelandic usually does not use a separate word for the. Instead, it attaches the article to the noun itself.

Because for this noun, the nominative and accusative singular look the same.

The noun hús is a neuter noun, and many neuter nouns have the same form in nominative and accusative.

So:

• nominative: húsið
• accusative: húsið

But other cases do look different, for example:

• dative: húsinu
• genitive: hússins

So the case is still accusative after kringum, even though the form happens to stay húsið.

Yes, you often can.

Both kringum húsið and í kringum húsið can mean around the house.

Very roughly:

• kringum is direct and simple
• í kringum is also very common and can sound a little more idiomatic in many contexts

In this sentence, Við göngum kringum húsið is completely normal.

Yes, but the basic order here is the most neutral one:

• Við göngum kringum húsið

That is:

• subject + verb + prepositional phrase

Icelandic is a verb-second language in main clauses. That means if you move something else to the front, the verb usually still stays in the second position.

For example, a more marked version could be:

• Kringum húsið göngum við

That is possible, but it sounds more emphatic, literary, or unusual than the basic sentence.

So for a learner, Við göngum kringum húsið is the safest and most natural order.

The hardest bits for many English speakers are these:

• ð in við and húsið
  This is like the th in this, not the th in thin.

• ö in göngum
  This has no exact English equivalent. It is somewhat like German ö, or a rounded version of the vowel in some pronunciations of bird.

• ú in húsið
  This is like oo in food.

Also, the definite article is part of the noun, so húsið is pronounced as one word, not as separate house + the.

A helpful learner-level approximation is:

• við ≈ vith
• húsið ≈ hoo-sith

Those are only rough guides, but they point you in the right direction.