U.S. Families Spend Over Half of Income on Housing and Childcare

A report released by Redfin on August 17 reveals that the typical working family in the United States spends 52 percent of their annual income on housing and childcare combined. Utilizing data from the childcare marketplace Winnie, the study found extreme regional disparities, with families in Los Angeles spending 96.8 percent of their income on these costs, followed by New York City and San Francisco. Conversely, families in Little Rock, Arkansas, spend the least, at under 40 percent.

Data from KPMG indicates that childcare and preschool costs rose 263 percent between 1990 and April 2024. This increase has outpaced general inflation, a trend attributed to a labor shortage within the care economy.

Experts suggest that the current financial burden necessitates systemic change. Sara Mauskopf of Winnie advised families to consider both cost and actual availability of care when relocating. Meanwhile, Glencora Haskins of the Brookings Institution called for federal reforms, including increased subsidies and state-imposed price caps, noting that no U.S. state currently meets federal affordability standards for childcare.