There is an aftermarket option that works (I have just installed and test it on an iPhone 7): https://www.partsfixit.com/jc-universal-home-button-with-return-back-function-for-iphone-7-7-plus-8-8-plus It comes with a home button and little connector for the logic board. The connector must be secure and lined up and having the shield secured ensures that. Then the button pairs with the phone through bluetooth. Very grateful for this option now.
Had the same issue, also still present when the screws were not secured. I was thinking it could have been the connector ribbon as I pulled the edge up a bit when trying to take the connector plate off it (I didn't rip the connector but it just pealed at bit from the connection piece), but not certain.