According to records kept by the Studio Management Services unit of the Professional Photographers of America, home-based studios tend to be the most profitable of portrait studios.
However, these are what shotsbysheryl has talked about: Genuine studio spaces that are on the same property as the photographer's living spaces. It could be, for instance, a downtown building in which the studio is the lower floor and the photographer lives on the upper floor. Or it could be a home in a residential area (where zoning allows) that has dedicated studio spaces. I have a good photographer friend who recently bought an old 3-story Victorian in our town--she's using the entire lower floor as her studio and business spaces. The family lives in the upper floors.
What I'm saying is that you need sufficient dedicated business space to make it work well. Although many photographers have certainly started out using a living room, bedroom, garage, or basement as studio space, I don't know of many who have made a successful business with that as a permanent arrangement. There are too many issues involved with sharing living and business spaces, and some of these issues can leave you on the bad end of a lawsuit.
If you're building a house, build real space for running a business: A separate entrance, sufficiently sized shooting room, space for equipment storage, sufficiently sized dressing/restroom, waiting space, office, packaging space, et cetera. Your local laws may require you to give consideration to handicapped accessibility requirements in a new building. There are going to be some insurance requirements as well.