Your husband works out of town no matter what town you live in? In other words, you are saying he travels a lot? If he works in a different town than where you are, but always works there and does not travel, it might be worth moving to that town.
He is all over the place, out of town for two weeks at a time and home for one.
I'm trying to understand how much pressure you are under. You have actually sold your house and are now out of it, and are only now trying to decide where to look for a new house? Or is the house just on the market?
If you haven't sold it yet and don't want to leave the neighborhood, but can't afford any larger of a house there, I would suggest staying in it as long as you can no matter how crowded it is, to save more money for a bigger house in the neighborhood. Think of how a frugal shopper saves on things by stretching out their use to the point where they are almost not useful any more, just so they don't have to spend so soon.
But if you have literally sold it and have to be out, your choices sound like buying another too-small house in the same neighborhood (or buying a house with problems that are serious enough to knock down the price), or moving to the burbs or a small town (check the suburbs first, you'd be surprised by how much the price drops when you get out of the priciest parts of town. You might find the price drops closer in than you think.)
I would say to stay where you like it, but you will certainly make friends wherever you go, and if you can only afford a small house again where you are, there will be tensions that come from being cramped, and you'll want to move relatively soon, a costly proposition. I mean, moving from one small place where you are too cramped to another small place where you are too cramped defeats the purpose.
I would also caution against turning a blind eye to problems in a fixer-upper that looks good to you merely because you want to stay in the neighborhood. If you are expecting a baby, needed construction projects at home or finding hidden flaws in a house can put you under a ton of stress for a long time, especially if you can only afford to make the repairs slowly.
I say stay where you are! Nothing is worse than being away from family right now. Rent a place for a year, put money in the bank, and enjoy new baby. I made the mistake of leaving sand I have no one with me. And it *****!