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Have you tried to reset the "Haptic Feedback" touch for the home button?
Open “Settings” and go to “General”
Choose “Home Button” to access the Home button click preferences.
Tap on the 1, 2, or 3, and then press the Home button to test how it feels.
Exit Settings when satisfied with the Home button feedback.
If that doesn't help and your home button is still not working, try re-booting your iPhone 7. And finally, take it to Apple if after all that you can not get it to work.