I was in your exact same position up until I had my 2nd baby in February. I always wanted to be home with my first born, but living on 1 income just wasn't an option. I think had we given up a lot, we probably could have made it work but I'm not willing to change my quality of life. My husband and I want a nice family vacation every year, my husband would have had to sell his motorcycle, our pensions would have greatly suffered and then where we will be when retirement gets here, we still have to put them through college, buy then cars in years to come, etc etc etc. There are many more things to consider than just "being home." You have to look to your future, both financially and professionally, long-term and short.
So after I had my 2nd, I was laid off. I am now just returning to work next week. I looked for a job like it was my job, spending about 20+ hours/week at it. It took me until just now to find employment and I have an excellent background and education. Needless to say, I had always been a working M. so I thought the change would be nice. It was, I'm very glad I had it but I am MORE than ready to return to work. Honestly, having my children in daycare, I've found, is good for them. My toddler thrives around other children and he learns much better from his peers than just mommy 24/7. Also, I'm a happier person. I think quality over quantity is what you have to really break it down to. I found that many days I was too busy cleaning, running errands, etc, that I wasn't even spending much time with them anyway. At daycare, they have a fun and educational environment that fosters much more in my child than I could do alone.
There is no perfect answer and both ways have their stressors but I have to say, keeping my career on track and moving forward financially so we can be secure, both now and when we retire, is something I won't give up.