/home directory has the execute permission set for everyone so that users can move into their homes inside but each user's home only has permissions for the user (unless configured otherwise for some reason).
The only way to get exactly what you want is by creating a group containing
user2 and giving it execute permissions for home of
user1 and the directories above the one that you want to share to make them traversable by
user2 and then set the full permissions on the full directory. I would not recommend doing this as
user2 would be able to ls specific files and subdirectories inside of the home of
user1 which is a bad idea. You don't want to give another user permissions to someone else's home.
A better way to accomplish this would be to either make a directory in
/ and create a group containing the users and give them permissions to it or to create an nfs export with permissions for the two users only and mount it on the machine. Once again, do not give another user access to someone else's home.