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As others have already said, you're not required to allow any race in your homebrew setting. Heck, half my settings only allow humans and that's it (not DnD though).
That being said, if you go for high fantasy, I think elementals (aka genasi) always add quite a bit to the lore and I would add at least one scaly race. Be it Dragonborn, Lizardmen or Naga and maybe a beast race if it fits your world.
But it really depends on the kind of world you want.
Honestly I make all the tolkien races, them if players want other races I invent cultures as we go.
Nothing is required. It's your world. I restrict mine to "no furry races" like Tabaxi or other anthropomorphic races. I do allow avian races because they're harder to play, dragonborn, as well as Firbolg.
In my home setting, I'm very particular about what races players can pick. None of the furry races, and generally just a handful of the fantasy races.
However, I told them up front that the mechanics of every WOTC-made race were on the table. So if a player wanted the mechanics of a Tabaxi, that's fine. You're just a really fast human/elf. We would reflavour the race to for in my setting. Because flavour is free and players like to have options. If the player and I can't think of a reflavour, they can't play the race.
Is the furry ban caused by an over enthusiastic bard?
Nah, I just don't like the genre of fantasy they evoke
I only build what is currently necessary. It is not necessary to know the origin of the race I am playing to have fun with it. A lot of the time, less is more.
This. You might be tempted to have a whole cosmology and long history of your world, and honestly that's fine if you have the time and energy to write it all down and keep track. But if it's just for a campaign, usually it's better to have a bare bones idea of what the race's place in the world is. Sometimes players want to be able to fill in their own gaps, and sometimes that can lead to the best ideas.
None, that said my opinion doesn't matter.
Talk to your players. Explain your thought process. Ask them what they would miss. Come to a compromise.
Basically all the races in lord of the rings would be ideal. Don't forget about the giant spiders and treeants.
Personally, I'm rather fond of fairies and drow too.
Would love to see Inklings in d&d as well.
You are legally required to have dragonborn WITH TAILS. Sorry, I don't make the rules.
But why have them at all? They don't seem to do anything thematically that dwarves or orcs can't do better
It covers the very common case of new players who want to be dragons. You point them at dragonborn and tell them to go to town.
It's really not as busted as it sounds, especially since this is likely a dragon with 1d8 hit points and a 15 in its highest stat
Personally, I think the best way to nerf a Dragon PC is strict timekeeping. Each year they get slightly bigger, each week their claws grow just enough to keep them from permanently silvering their claws, etc
All I meant by this is that there is a common fantasy that the dragonborn race option fulfills that is not thematically fulfilled by dwarves and orcs. If you think a different or custom race would fulfill that fantasy better then that's great too.
Not what you're asking, but relevant: I've mostly played in homebrew worlds and exclusively DMd homebrew, and what ive found is actually having the different races have some representation means more than their historical heritage in the world. If it comes up, maybe in prep detail it out a little. If there's only one Tabaxi in the world, it's origin is more suspicious (needs explanation) than if players encounter them occasionally.
Wanting my players to be open to trying less common races I recently made a d100 including every race I could find so that the NPCs can be anything instead of whatever pops in my head in a rush to describe the shopkeep.