Domino, I didn't read your entire post, but I "get it" about this family. Because I didn't read the entire post, I'm unclear as to whether or not this "family" is cohabitating in this run-down house that you were pressured into buying, or if there are children as a result of your marriage.
I can't (and, won't) tell you what to do - you've engaged in counseling to save your marriage, but this marriage is doomed, regardless of how much counseling you've engaged in with your husband. He is allowing this abuse, and you clearly have a choice before you: stay and manage this misery until such time as your husband (and/or his family) calls it quits, or get the hell out and recover from these experiences before you get involved in an extramarital affair or choose another narcissist. That's it.
If there are children as a result of this marriage, you have my most heartfelt pity because those children will (without fail) be raised to become perfect narcissists, themselves, or perfect victims.
From my personal experiences, my own past issues (from early childhood, on) are directly related to the sociopaths that I ended up marrying during the past 30 years. The first one was abusive on every level, and the second one was a seemingly benign predator that married me for my money and maintained a deviant, violent sexua| "double-life" that was exposed over a year ago. The financial frauds that the second exspath included coercion, forgeries, and raiding of my private investments. Because I did not understand myself, first, I did not understand the set up and long-con of this second exspath which has resulted in life being utterly destroyed. Financially, spiritually, sexually, emotionally, and physically, I was left completely dismantled.
Having typed that, this whole-self devastation has resulted in my determination to learn from these experiences and to educate others about what sociopathy is, who a sociopath might be, and how to protect one's Self (Self = soul) from experiencing the same devastation that I have. This is my opportunity to learn about boundaries and construct them. This is also my opportunity to recognize that I do not (do not) have to tolerate anyone's "bad behaviors" because I crave approval and acceptance. I am learning to validate myself so that I can choose whether or not to "trust" another human being. I do not "feel" obligated to tolerate any type of behavior that I find inappropriate, distasteful, dishonest, or harmful to me or others. Although I'm recovering and I'll be okay, in due time, I would not wish my experiences upon another human being, even the predatory exspath that destroyed my life.
The family dynamics of your husband echoes that of the second predatory exspath, and these dynamics will never, ever, EVER change. Certainly, there is an "environmental" influence, but there are also questions about the role that genetics plays in sociopathic tendencies. Some of the behaviors and actions that you're describing are hard-core sociopathic tendencies, and there is no "safe" or "successful" method of managing these tendencies. Sociopathy cannot be medicated, surgically removed, counseled away, or spiritually zapped. It is a lifelong and terminal disorder that results in damages, across the boards.
Visit the following website to learn more about sociopathy and recovery: www.lovefraud.com
I wish you the very best.
EDIT ADD: Domino, I went back and read over your post and it seems that you did not produce children within this marriage. A very wise decision. But, what I also am reading is that you believe that the marriage is "strong" and that you will "make it work." I would urge you to visit the website that I posted, above, and learn more about your situation. The marriage isn't "strong," by any stretch of the imagination, and the only thing that seems to be "working" in overdrive is the blatant abuse that you're enduring and tolerating to please the husband and his family.
There are very few things in this lifetime that are a certainty. But, what is vital for you to accept is that, the more years that go by, the more damages you will suffer regardless of whom is perpetrating the damages. The family dynamics that you're describing are almost carbon-copied of the ones that I experienced with the second exspath, and these people (and, their son) are never, ever going to change.