Childcare is costlier than rent for the average family, new study finds

America’s affordability crisis is making it harder for families to raise kids.

According to a new report from Child Care Aware of America, the cost of putting two kids in childcare exceeds average rent prices in most U.S. states.

In fact, childcare now accounts for 10% of a married couple’s paycheck, exceeding the government’s recommendation that it shouldn’t exceed 7% of their income.

In the Midwest, it costs $23,803 per year to put two kids in childcare, compared to $21,907 for housing. In the Northeast, the average annual childcare cost is $32,614, compared to $27,433 for housing.

Meanwhile, childcare costs in the South are $22,549, compared to $21,494 for housing.

The only region where housing costs are more expensive than childcare is the West.

“If housing costs and childcare costs are both incredibly high, that leaves very little for other kinds of things that families [...] need and want to buy for their children, for themselves, for their healthcare expenses and other portions of their budget,” said Susan Gale Perry, the CEO of Child Care of America.

Despite inflation driving up the prices of college tuition, transportation, food, and healthcare, childcare costs exceed every one of those categories by a wide margin, the study showed.

The study is yet another proof that being a parent in America has never been more expensive than it is today.

The true cost of raising a child

When it comes to the cost of raising kids, childcare is only part of the equation.

Civic engagement expenses, food, housing, healthcare, internet and phone, transportation, and other necessities all inflate the price tag of raising kids.

A recent report from Creditnews Research determined that the total cost of raising one child is $22,989 annually—or $413,810 until the age of 18. That means a typical U.S. household needs to earn $91,608 just to afford one child.

Families with two children need a whopping $114,898 annually to cover the entire household’s living expenses.

By comparison, the average U.S. household earns less than $75,000 each year.

It comes as little surprise that many of America’s youth are putting off having a family indefinitely—with the U.S. fertility rate below the replacement rate needed to sustain healthy population growth.

According to a pre-pandemic study by The New York Times, “economic insecurity” is the biggest reason why young adults refuse to have kids. Fast forward to 2024, a survey by The Harris Poll reached similar conclusions.

For many people, the cost of children is so high that they delay having kids, skip having them altogether, or have fewer children than they would have otherwise,” said Kimberly Palmer, a personal finance expert.