You can probably change it in the app settings, or just change it here: https://maps.google.com/locationhistory/b/0/dashboard

Or here: https://maps.google.com/maps/myplaces?&hl=en

You can set your home address within Google Maps if you're logged into the same account Google Now is associated with. You can set your work address as well.

If you prefer to have it automagically know your work and home addresses, you can wait a few days and it will discover these on its own using GPS data.

I think if you use Google Maps and star / favourite your home location it will utilize that data in Now (for your commutes and such).

It figures it out based on, I assume, where you sleep most nights.