I really struggled with this because I couldn't access the iphone because the home button wasn't working and then the itunes account would prompt me to "respond on the iphone to continue" and I couldn't do that because the only way to do that was to push the home button.
So here are the work arounds I found and what worked for me:
If you can access iTunes and see your phone there (you're lucky):
You need to activate the accessibility function, Voice Over, on your phone.
Connect your iPhone, to a computer with iTunes installed.
In iTunes, select your device.
From the Summary pane, click Configure Accessibility in the Options section at the bottom.
Select the Voice Over and click OK.
Double tap on the Press home to open text.
Once you’re pass the activation, you can disable VoiceOver.
If you can't:
- keep the phone plugged into your computer
-power it off (shut it down)
- restart it.
- at this point, you will probably see a whole bunch of prompts in iTunes. whatever you do, DONT press STOP when the screen pops up to respond on your iPhone
- a prompt will pop up on your iphone if you want to trust this computer
- press trust and proceed to set up your iphone manually
- go immidietaly into settings and turn on assistive touch to activate a floating home button
You can activate Assistive Touch to have a floating software button that will let you press the home button.
Go to Settings App > General > Accessibility > AssistiveTouch (slide switch to the right)