In a medium bowl, whisk together the all-purpose flour, baking powder, and salt. Set aside.
In a large bowl, beat the softened unsalted butter and granulated sugar together on medium speed until light and fluffy, about 3-4 minutes.
Add the egg, vanilla extract, and almond extract to the butter mixture and beat until combined.
Gradually add the dry ingredients to the wet ingredients, alternating with the milk, beginning and ending with the dry ingredients. Mix until just combined.
Divide the dough into two equal portions, flatten each into a disk, wrap in plastic wrap, and refrigerate for at least 1 hour.
Preheat the oven to 350°F (175°C). Line baking sheets with parchment paper.
Roll out one disk of dough on a lightly floured surface to about 1/4 inch thickness.
Using a cookie house template, cut out the following pieces: 2 side walls, 2 roof panels, 1 front wall with door and window cutouts, and 1 back wall. Transfer to the prepared baking sheets.
Bake the cookies for 10-12 minutes or until the edges are lightly golden. Let cool on the baking sheet for 5 minutes, then transfer to a wire rack to cool completely.
Prepare the royal icing by combining the powdered sugar, meringue powder, and warm water in a mixing bowl. Beat on high speed until stiff peaks form, about 5-7 minutes. Divide and color with food coloring gel if desired.
Use the royal icing as glue to assemble the cookie house: pipe icing along the edges of the walls and press together. Hold in place for a few minutes to set.
Attach the roof panels with royal icing and hold until secure.
Decorate the assembled house with remaining royal icing and additional candies or decorations as desired. Allow the house to dry completely before moving, about 4 hours.