At this time, you need to use app passwords with Outlook.com accounts in Outlook desktop.
A user was griping about support for Multi Factor authentication (MFA) in Outlook Home version:
Multi Factor auth is enabled on my Office 365 account. I don't have problems using Outlook and MFA at work (with an Office 365 Enterprise license) but at home I need to use an app password in Outlook 2016 from my Home Premium subscription.
Not all programs support MFA at this time, so you may not be able to avoid using App passwords completely, but you don't need app passwords with Outlook 2013 or 2016. You can set a registry key on your home computer to enable MFA in Outlook.
If you need to create an app password, create a new at Office 365 App Password.
For Outlook 2016, use
This key is also used to enable MFA in Outlook 2013, however you need to change 16.0 to 15.0
Do It For Me
If you don't want to edit the registry yourself, use one of these ready-to-use reg files. Note: you may need to right click on the link and choose Save target as or Save link as to save it to your hard drive. Double click on the reg file to run it.
EnableADAL Outlook 2016 EnableADAL Outlook 2013
There are other Enterprise features missing from Outlook Home, such as the archive mailbox and retention policies. Unfortunately, there isn't a registry key that will enable these features. You'll need to use Outlook on the web if you need to look at something in your archive mailbox or apply retention policies.