The word "home" is supposed to inspire warm and fuzzy feelings in us. But when we're torn from our home, it takes on a whole new meaning. While at Bag End, Frodo is "in love with the Shire, with woods and fields and little rivers" (1.1.84). But Frodo loves the Shire even more when he has to leave it behind to go on his great quest. In fact, a lot of The Fellowship of the Ring focuses on the painful emotions of various people leaving or losing their homes. Rivendell is home to the Elves, but we know that it's fading even at this early stage of the trilogy. Lothlórien is a beautiful place, but it is also diminishing in power. The Elves are clearly on their way out of Middle-earth, and their realms are dying away. And as for the Dwarves, their great ancestral home of Khazad-dûm is crawling with Orcs; there is no way they can go back. This horrible sense of loss that the traveling Hobbits, Elves, and Dwarves all feel shows us how much they value the places they come from. Middle-earth seems even more precious (and worth defending from Sauron) because it is so loved by its inhabitants.
Tolkien uses descriptions of their various dwellings as tools to characterize the different peoples of Middle-earth.
In Tolkien's works, language becomes as important as architecture in evoking a sense of home: the characteristic songs and legends that join a folk together are just as important as the place they live.