Smart homes have been predominantly pointed as one of the key constituents of intelligent environments. These are residential units substantially integrated with a communicating network of sensors and intelligent systems based on the application of new design initiatives and creative technologies. This study provides a holistic overview on the essence of smart homes besides demonstrating their current status, benefits and future directions. The study reveals that smart homes embrace significant potentials towards achieving comfort, security, independent lifestyle and enhanced quality of life. Findings urge the necessity to focus on further exploration of the social and environmental benefits derived from the application of creative technologies in smart homes. The study concludes that smart homes play a fundamental role in shaping the future cities. Finally, the study identifies a research gap indicating that there has been less consideration towards linking the fundamental potentials of smart homes to the overall performance and key indicators of smart cities.