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We were such good friends that we often went to each other's houses.
Literal
We [topic-は] very close-friends [copula-で] mutual [genitive-の] houses [object-を] often go-and-come [genitive-の] relationship [copula-でした].
Nostalgic reflection. 仲良し ('good friends, on good terms') is a noun/adjective from 仲 ('relationship, terms') + 良し ('good,' classical 良い). お互いの ('mutual, each other's') uses the honorific prefix お-. 行き来する ('to go and come, come and go freely') is a compound verb capturing regular bidirectional movement. The whole is framed as a description of 'the relationship of frequently going between houses.'