Nothing bad happened. Being in the house makes her feel the loss of the life we built. We picked out the house together, we got married, we had three kids there. It's filled with memories for her, and it's very hard for her to be there now. It's hard for me too, and unfortunately for me, I LIVE there.
She has come to the house briefly to stand in the entry way to pick up the kids, but the last time she was really in the house was back in September when she went in to clear more of her stuff out. She was in a lot of emotional pain. I came in and could see how much she was hurting. After a while she asked me to sit down in the living room. She started reminiscing about our memories there, good memories of us and the kids. When I heard that I really thought our M had a chance. As she left, she said she's just realized how hard it must be for the kids to be there without her. I just nodded.
So when she says she can't handle being in the house, she means it's too emotionally painful. I think she's being a little over dramatic, but that's her.