We are obviously nowhere near FIRE. We've been making a lot of money and have absolutely squandered it with nothing to show, BUT, at least we don't have a lot of debt besides the car. We are mostly needing advice about buying vs. renting, what to do with our IRA, and our auto loan.
Sounds like the drop in your husband's income has been a rude awakening to the exploding volcano of wastefulness your life has been! You have a long ways to go, but at least you're here! That is an important first step.
The advice you're specifically asking for:
1) Do not buy! You are not ready at this point to make that jump, even if you can get a cheaper mortgage than your rent. Get your shit together for a year, and then take a good hard look again. And, I feel most would agree that you definitely are not in a position to become landlords, if a bank would even loan you the money necessary for an investment property. $12k probably would not be a sufficient down payment.
2) Leave your IRA invested, and start adding to it instead of subtracting from it! Simple.
3) How much is left on the car loan, and what is the interest rate? What is the blue book value on the vehicle? Is the Prius not working at all right now for hauling gear, or is it just not ideal? Can your son learn to play the flute instead? Nice and small! Just kidding, but in all seriousness, you are on shaky financial footing so changing vehicles needlessly right now may be unwise. But again, depends a lot on what the details are on that loan.
Now, for the advice you didn't really ask for!
4) Your husband should be looking for a new job. If he was making "double that" 48K and is a GM, he should see what his value is to a company not in trouble.
5) I agree that your auto insurance/renters seems high. Get that below $100 at least, and even then it would still be a bit high I think. Can you break it apart so we can see how much is Auto and how much is Renters?
6)Life Insurance seems high, but I think at the moment if one of you were to die, the other would be in trouble. Let it ride for a while more until you get your finances in order.
7)Cell Phones are way to high. How many are you paying for? Are your kids paying for their own if they have them, or at least earning them through some chores? What about dad?
8) $280 seems high for utilities. Learn to use less of all. When the time does come to get a new place, consider potential utility costs as you weigh your options.
9)Mozy online backup? Why do you need that? Look at google drive or amazon cloud for much less if you think you need it at all.
10) Gas seems really high for a Prius and an Accent and only one commuter. How far are you hauling your son's gear multiple times a week?
11) As you already know, your groceries and miscellaneous categories are a big wasteful mess. Figure out what is actually going on here, and reduce!
12) Is your dad's $440 a fair amount? I have no idea, but is he helping with kids or cooking dinner or paying for groceries or what? Does he drive your vehicles? Is he retired or working or not able to live on his own or doing you a favor by renting a room? This sounds harsh, but if he is costing you more than $440 you might need to figure a way to remedy this in some way that makes sense.