It's more used more often in written English than in spoken, so it depends on how you are going to use it. I wouldn't say "I'm expanding my family" if I was talking to another person. I'd probably say "We are having a baby" or "We are adding to our family." However in a book, such as a novel, you might hear the expression "expanding the family."
So, not common in spoken English, but you would be understood.