Yikes, that is really tight. Tough spot. I'm hoping that the wall with the oven/pantry/closet isn't structural. If not, I would open that space. For the kitchen, get rid of the U shape. Keep the sink where it is. Then continuing along the wall towards the dining area windows, put the DW next to sink, lower cabinet with drawers, then fridge, then pantry cabinets. Where you have a cooktop, put in a range, then another lower cabinet with drawers, and you get some useful countertop on both sides of your cooktop. Rotate your dining table 90 degrees and push it into the space created by removing the pantry/closet space.

If you can't open up the pantry area, I would still ditch the U. But the DW immediately beside the sink on the wall. Replace the cooktop with a range, because having the oven so far away and opening into a pathway is bad. Use a small narrow rolling kitchen cart behind the sink run to give a little extra worktop.

Will you be replacing cabinets or working with what you have?

Do you have a budget range in mind or are you in the gathering ideas stage?

If you would like comments on organizing what you have in the meantime, just ask.

Do you have a budget in mind? Do you want input on a full gut-job redesign, or just small changes? Looks like storage is a priority.

Thanks for all the responses! we are not looking to break the entire bank high side 20k. But new cabinets, yes more storage, I am a pretty big diyer but won’t touch Plumbing or electrical keep the ideas coming thank you!

New cabinets and new counters? I can't comment on the budget, but someone will be along soon to burst your bubble. :[

I would use a range instead of the separate cooktop and oven, then extend the pantry. Square the peninsula and extend to 7' to include the sink and DW, so all the counter in the U is prep space. Not exactly to scale:

NKBA guidelines

New to Kitchens? Read me first.

Does your house have a dining room, or is the eating area here the only place to eat in the house?

If you have a dining room, I would expand the kitchen into that space and start using the dining room as your main eating area. You could extend the cabinets all the way down the wall to the windows, which would totally change the functionality of the kitchen. You could have a small sitting area for a couple people so that visiting or snacking in the kitchen is still possible, but I would prioritize the space for cooking and move family eating to a different space.

20K is tight and may not be realistic for what you are wanting, and if appliances need to be moved/replaced, even with some diy. Are you anywhere near an IKEA? If so, that may be a place to go for a design and cabinetry. I find IKEA to be the best economic bang for the buck. I agree with the idea of getting a range and getting rid of the wall oven in that odd area. Is the dining space we see the only dining space in the house? Wondering how more of that space might be used to expand the kitchen work area.

I would say budget isn’t an issue then, I know my wife wants an island and the kitchen is going to be a total gut job, any way to find out if that pantry actually is part of the structure? You guys are great!

And yes that’s the only eating area we are open to using an island as our eating area

Also if it’s dirty we do have a newborn and a 20 month old haha

Congratulations on your new baby! With a toddler, too, that's a handful. The sheer volume of baby and toddler bottles and dishes is amazing. The more that can go in the dishwasher, the better. If the gap next to the dishwasher can be made usable with shelves and walling off the dishwasher, it may help tide you over with more storage.

With a newborn and a toddler, it may be a year or so before you can actually start a remodel. My suggestion is to draw up a floor plan that is a duplicate of what you have now, then use the online planner to get an estimate for the duplicate. There's no need to actually go to Ikea to use their planner online. Then you will have a base for comparison as you move toward an extensive remodel.

https://www.ikea.com/us/en/planners/

An experienced general contractor or structural engineer can tell you if the pantry and closet walls are load-bearing or not.

Do you have an accessible attic? Start by figuring out which way your ceiling joists run. Walls that run perpindicular to the joists are more likely to be load bearing. That's not a substitute for consulting with an engineer, but it's a quick check to get a sense of how feasible an idea is.

If you can remove the pantry and oven cabinet how much space will you have for an island? The work aisle should be 48" (42" minimum, but with small kids running around 48" would be better). For comfortable seating at counter height the island overhang should be at least 15", plus the cabinet boxes and front overhang, the island will be almost 42" deep. Traffic aisle should be 44" to walk behind (36" to 'slide behind'), but more would be better. Best case scenario is 13.5'; minimum 12'2". (See links above for sources.) However, this sounds like it's a starter home with resale in the future, so you should consider carefully before installing an island as the only dining area.