Well WordPress is a system that keeps track of its pages. The home page in this case is not a stand alone HTML page with a .html extension. You would create the page using WordPress (logging into WordPress, add new page, create the page and then in settings tell WordPress that the new page is homepage). You wouldn’t be creating your files in some subfolder or anything. You have to create them on the platform itself.
Hopefully that makes sense.
Edit: The page you create can be private of course until you are ready to publish it live. So you can login, work on it, preview it and such and when it all looks good, publish it and then switch it over in settings. Again, you would follow the directions under the subtopic “How to Set a Static Homepage”