Half Of Typical US Family's Paycheck Swallowed By Housing, Childcare

Authored by Andrew Moran via The Epoch Times,

Typical families in the United States spend half of their income on housing and childcare, according to a report released on Aug. 17 from the real estate platform Redfin.

Based on data from Redfin and childcare marketplace Winnie, the typical working family purchasing a home today spends 52 percent of their annual income on housing and childcare combined.

While these costs can decrease as children enroll in public pre-K or kindergarten, researchers say that where a family resides can significantly influence these costs.

Among the 100 most populous U.S. metros, working families residing in Little Rock, Arkansas, would spend less than 40 percent - the least in the country.

Annual housing and childcare costs would total $29,151 for the typical Little Rock working family, compared with a median local income of about $73,000.

The next two most affordable metros include Oklahoma City, Oklahoma (40.8 percent) and Des Moines, Iowa (41.8 percent).

Conversely, Los Angeles had the highest cost nationwide: 96.8 percent. Families spend a combined $94,613, about $3,000 less than the median local income of almost $98,000.

The next least affordable were New York City (95 percent) and San Francisco (94.2 percent).

The numbers indicate that families need to factor in childcare and early childhood education into their affordability calculations, says Sara Mauskopf, co-founder and CEO of Winnie.

"Families considering a move should weigh both of those big costs - as well as job opportunities - when deciding where to put down roots," Mauskopf said in a statement.

"Families should also make sure childcare is actually available near where they want to live. If care is scarce or unaffordable, an otherwise affordable area may not be a practical place for a family with young children."

Another challenge for families may be that home prices are modest, but childcare costs account for a sizable share of household budgets.

In Buffalo, New York, for example, childcare can make up nearly half of the combined childcare and housing price tag.

Other cities have far lower ratios, Redfin reported.

Dallas had the lowest share of family income going toward childcare, at 11 percent. This was followed by Charleston, South Carolina (11.4 percent) and Austin, Texas (11.6 percent).

Labor Shortage Cited

Families across the country have endured immense childcare costs for years.

Care.com released its 13th annual Cost of Care Report for 2026 in January. It found that the average weekly cost of daycare or a family care center for one child exceeded $300 last year. For families with two children, the number was slightly below $600.

Zooming out reveals a more financially dire picture of childcare costs, which even outpace general inflation, according to a report by the tax firm KPMG.

Between 1990 and April 2024, the cost of day care and preschool climbed 263 percent. By comparison, the consumer price index rose by 133 percent over the same period.

A key contributor, KPMG researchers say, is a labor shortage in both childcare and eldercare, which is pushing prices up faster than inflation.

"In 2026, growing challenges in the care economy will increasingly affect workforce outcomes, employer costs and overall economic performance. Though all states and industries are impacted, some are more at risk than others," the report stated.

The federal government and states need to implement reforms to adapt to changing conditions and ensure working families can afford childcare, says Glencora Haskins, a senior research associate at the Brookings Institution.

Some measures could consist of bolstering federal subsidies and states imposing price caps.

"The fact that there is no U.S. state that meets HHS's affordability standard for childcare demonstrates that the need for federal relief is both widespread and severe," Haskins said in a July paper.

"In sum, the potential benefits of federal childcare subsidization are being hamstrung by three main factors: insufficient funding, prohibitive eligibility standards, and misaligned affordability thresholds."