Thanks everyone for the input regarding the house. I would say my sitch might resemble AS's brother, where keeping the house would require cashing in the 401K with taxes and penalties, etc, and after that I would be in a precarious financial position moving forward. No thanks. I'll rent for a year or two while I strategize buying another smaller, more affordable house that will allow me some extra $$ for saving/investing and funding fun things for the kids.
The rental I have a deposit on is in a neighborhood where homes are more affordable and therefore there are a lot more families than my current neighborhood. Kids playing in the street, running back and forth between houses, etc. From an environment perspective it is a major upgrade for the kids compared to my current neighborhood.
The 4th was fun, we went to a big party at a friends house, I spent most of my time talking with friends and playing with the kids in the pool. Probably spent a total of 10 minutes altogether interacting with W, only on logistics of getting the kids fed, dried off out of the pool, etc. Great day.