At 32, and the housing market being what it is, I'd ride out the investment in your current home.
You're going to put a lot of money in that 1957 home, be sure to factor that in.
Consider kids. I don't know if you have any, how many, or if you're done making them. Will the parent's house provide enough room? Is it the place you want to retire to?
It boils down to what you love.
If your current home makes you happy, it's worth whatever the cost. Planning for retirement is great, but you need to balance the cost in your quality of life now. Things happen. I'd suggest you put your family's quality of life now in first position. Maybe that early retirement never comes due to circumstances beyond your control.
You'll never be disappointed if you've led a full life already when it comes time to retire. You can always downsize later and likely do better, or revisit this in 10 years.
You may lose the opportunity to buy your parent's house, but it's also likely to come back on the market somewhere down the road.
Or go ahead and buy your parent's place. Just make sure your choice is what will make you smile every day. Don't let your decision be influenced more by dollars and cents than your happiness. Life is way too short, my friend.
