I believe it is a transition from his belief that he will return home, to instead refer to the belief that the "children of Israel" as a whole will find their home. This transition can be seen in the musical progression as it goes from his solo performance of the chorus to the ensemble echoing him until, at the end of the song, they're singing in concert with him.
This, of course, could be seen as a commentary on the existence of a country of Israel as a home for the Israelites, particularly due to the progressive annexation of Palestine, which is why there was a controversy in Australia when one school changed the lyrics from "children of Israel" to "children of Kindness", resulting in the lyricist, Sir Tim Rice refusing permission for the change and stating that the song is not supposed to be about "Israel and Palestine":
He added: "I mean Joseph is an innocent story straight from the Bible and these people in New Zealand thought we were making statements about Israel and Palestine - bonkers."
Andrew Lloyd Webber backing him on this decision, stating that the song is about the connection that Joseph makes with Israel.
Andrew Lloyd Webber, the show’s composer, recently shared his displeasure with the attempt to make unauthorized changes to their work. “Tim is quite right. You cannot re-invent a bible story,” he told The Guardian. “That song is a serious moment and a key point in the show. It is about the connection Joseph suddenly makes with Israel. Tim was paraphrasing the bible and it should be kept that way.”
In my mind, Andrew Lloyd Webber's statement backs my initial assertion on musical grounds that the transition from "I" to "We" signifies Joseph identifying with the entirety of his people.
