Both are appropriate.

"We," of course, is more inclusive and might indicate that the speaker thinks of himself/ herself in terms of the family:

A: Hi, David, how are you?
B: Fine, Kim, How are you?
A: Fine, thanks. Your family?
B: Oh, we're all fine. We're going on vacation next week.

"They" would more likely to be used if the speaker is far from his family:

A: Hi, Sydney, how are you?
B: Fine, Chris. How about you?
A: Fine, thanks. Your family?
B: Oh, they're all fine. Timmy won an award for soccer and Elisa is taking ballet lessons. I just wish I didn't have to be on the road like this so much and could be at home with them all the time.
_______

You could also say: "Everyone's fine, thanks."

Rachel

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