The error message usually indicates that Mathematica cannot find the file you ask it to read.
ReadList will import from the directory specified by Directory[] not $HomeDirectory.
In[6]:= $HomeDirectory
Directory[]
Out[6]= "C:\Users\epark"
Out[7]= "C:\Users\epark\Documents"
If the file is in the wrong spot, then ReadList will not be able to find it.
You can set the working directory by SetDirectory. For example, SetDirectory[NotebookDirectory[]] will set the directory of the current evaluation notebook as the working directory.