How to SSH to localhost without password?

I did following 3 steps to create the password less login

1. ssh-keygen -t rsa
Press enter for each line 
2. cat ~/.ssh/id_rsa.pub >> ~/.ssh/authorized_keys
3. chmod og-wx ~/.ssh/authorized_keys 

Have discovered the problem.

Running the server with debuging:

$sshd -Dd

I found it was not able to read the auth_key

$chmod 750 $HOME

Fixed it.

Another possible answer: the authorized_keys file may exist and be readable. But if it is group- or world-writable, it will still prompt for the password. The answer to THAT problem is

chmod og-wx ~/.ssh/authorized_keys

Two simple steps:

ssh-keygen -t rsa <Press enter for each line>
ssh-copy-id localhost

Enter password and you're done.