I'm almost done compiling Xorg7 according to the CBLFS instructions, but I'm stuck at a problem with xterm.

my XORG_PREFIX is /opt/X11R7

I have the necessary path variables set properly, and this has all worked fine through the Xorg build process.

When I configure xterm with the following command:

USE_ARCH=64 CC="gcc ${BUILD64}" \
PKG_CONFIG_PATH="${PKG_CONFIG_PATH64}" \
./configure ${XORG_CONFIG64} --enable-wide-chars \
--with-app-defaults=${XORG_PREFIX}/share/X11/app-defaults

the configure process fails with the following:
checking if you want to link with Xaw 3d library... no
checking if you want to link with neXT Athena library... no
checking if you want to link with Athena-Plus library... no
checking for XextCreateExtension in -lXext... no
checking for X11/Xaw/SimpleMenu.h... yes
checking for XawSimpleMenuAddGlobalActions in -lXaw -lXmu... no
checking for XawSimpleMenuAddGlobalActions in -lXaw -lXpm -lXmu... no
checking for XawSimpleMenuAddGlobalActions in -lXaw_s -lXmu_s... no
checking for -lXaw -lXmu in /usr/contrib/X11R6... no
checking for -lXaw -lXpm -lXmu in /usr/contrib/X11R6... no
checking for -lXaw_s -lXmu_s in /usr/contrib/X11R6... no
checking for -lXaw -lXmu in /usr/contrib/X11R5... no
checking for -lXaw -lXpm -lXmu in /usr/contrib/X11R5... no
checking for -lXaw_s -lXmu_s in /usr/contrib/X11R5... no
checking for -lXaw -lXmu in /usr/lib/X11R5... no
checking for -lXaw -lXpm -lXmu in /usr/lib/X11R5... no
checking for -lXaw_s -lXmu_s in /usr/lib/X11R5... no
checking for -lXaw -lXmu in /usr/local... no
checking for -lXaw -lXpm -lXmu in /usr/local... no
checking for -lXaw_s -lXmu_s in /usr/local... no
configure: error: Unable to successfully link Athena library (-lXaw) with test program

The configure script refuses to look for the necessary libraries in the proper path. I'm passing the ${XORG_CONFIG64} paths (which are: --prefix=/opt/X11R7 --libdir=/opt/X11R7/lib64 --sysconfdir=/etc --localstatedir=/var), but configure is only looking in /usr/lib/X11R5 and R6, etc.

I even skipped ahead to the "Configure X" page and created the FHS symlinks:
ln -sv ${XORG_PREFIX}/bin /usr/bin/X11
ln -sv ${XORG_PREFIX}/include/X11 /usr/include/X11
ln -sv ${XORG_PREFIX}/lib/X11 /usr/lib/X11
ln -sv ${XORG_PREFIX}/lib32/X11 /usr/lib32/X11
ln -sv ${XORG_PREFIX}/lib64/X11 /usr/lib64/X11
since my Xorg install was not in /usr. But, this did not help.

is there a patch I'm missing that fixes configure for xterm so it will look in the right place?

I have not found a fix for this yet, but I did download and build RXVT instead.

I was able to get a simple X server running with the example clock and RXVT terminal.