The equity in the house would not be sufficient to buy a suitable home for the wife and children outright. In fact, this is quite a common type of situation but it is important to appreciate that the outcome is not some formula which is automatically imposed by a court. The husband continues to pay maintenance for the children. It is also fair to point out that each of these courses of action has advantages and disadvantages which will come into the decision making process. Picking one's way through these options almost always needs professional advice so please continue if you would like to know more about how this all works in practice.
Ancillary relief is normally the most contentious part of any divorce proceeding.