Everything seems ok, apart from not having ran the 'ldconfig' command under root.
But for some reason the configure script has not correctly detected the path to your freetype2 libraries.
You may try to force the right path like that :
export XFT_CFLAGS="-I/home/hsaluja/local/include/freetype2 -I/home/hsaluja/local/include"
export XFT_LIBS="-L/home/hsaluja/local/lib -lfreetype -lz"
./configure <your options>
And also ask a system administrator to run as root, after each new installed package with shared libraries :
You can verify the presence of your libraries in the cache doing :
I think, as far as I know, that the 'ldconfig' command is necessary for your programs to use your local libraries, and furthermore they have to find them before the system wide libraries. So your shared libraries must appear before the system wide ones, but in this case I'm afraid the other programs which require freetype2 will use yours, rather than the system wide ones (normally that should not be a problem as they should be compatible).
I hope you will be able to obtain what you want, but without root privileges not everything is possible.