Child care is now more expensive than rent in all 50 states — ‘There is no escaping it’

United States

Housing costs may have gotten out of control, but there’s another expense that now poses an even greater burden to many American families: child care. 

Jessica Norwood, a working mother of two in North Carolina and host of the financial-literacy show “The Sugar Daddy Podcast,” said daycare costs when her two children were ages 3 and 4 added up to nearly $ 3,000 per month — almost twice her monthly mortgage payment of $ 1,580. 

“We were spending easily 55% of our pretax household income on our mortgage and child care,” said Norwood, who grew up in Germany. Her family looked into getting a nanny or an au pair, but found disadvantages to both.

“It’s no wonder so many people (i.e. women) leave work to stay home with their children,” Norwood told MarketWatch. “It’s all excruciatingly expensive.”

Norwood said her friends who work outside of the home and have young children all face this dilemma. “It’s a frequent topic of conversation in our group because there is no escaping it and, in most cases, there are no other viable options.”

The average cost of child care for two children is now greater than the average rent in all 50 states, and greater than the average mortgage payment in 45 states, according to a new report by the nonprofit Child Care Aware of America. 

Child care is considered affordable if it costs no more than 7% of a household’s income, according to the Department of Health and Human Services. Yet the typical cost of care for one child is 10% of income in married households and 32% of income for single parents, according to CCAoA. The actual expenditure is often higher, as the average American family has two children and most single-parent households also have more than one child, Census Bureau data show. 

The financial challenges facing families have impacted some people’s decision to have children. In a 2021 Pew survey, finances were the third-most common reason people said they didn’t plan to have children, after not wanting children and medical reasons.

“The reality is that for most families, everywhere, child care is very expensive, and it is a very large part of families’ monthly and yearly budgets. That is true in every region,” said Anne Hedgepeth, chief of policy and practice at CCAoA. “There may be different extremes, but child-care prices outpace almost everything else.” 

In the largest metro area, New York, the typical monthly cost of child care for two children is $ 2,634 while the typical monthly housing cost is $ 2,451, according to the Economic Policy Institute’s Family Budget Calculator, which estimates the typical costs for a modest standard of living around the country. 

But the problem is not unique to large, pricey coastal cities. In a smaller metropolitan area like Scranton, Pa., child care for two typically costs $ 1,541 per month while housing costs $ 1,008 monthly, according to the EPI’s calculator.

Even in Danville, Ill. — one of the lowest-cost housing markets in the country, according to — the typical monthly cost of child care is $ 999, outstripping the monthly housing cost of $ 878, per the calculator. ( is operated by News Corp subsidiary Move Inc.; MarketWatch publisher Dow Jones is also a subsidiary of News Corp.)

The American child-care system today is not only unaffordable for many families who need care, but also not providing livable wages for many of those who work in the field. Workers in child-care centers earn an average of $ 30,360 per year, according to the Bureau of Labor Statistics. 

“If parents can’t contribute more, and educators are making so little in the child-care and early-learning system, I think that really tells us that our investments are going to need to come from elsewhere, from places like our federal government,” Hedgepeth said.

A Biden administration rule announced earlier this year reduced costs for families that receive child-care subsidies, limiting the amount they pay to 7% of their household income. It is estimated to impact 100,000 children. 

“President Biden and I believe that every family in our nation should be able to access affordable child care,” Vice President Kamala Harris said in a statement. 

CCAoA’s policy recommendation is for lawmakers in Congress and in state governments to expand funding for the system, so that states can “provide more families with subsidies, lower the price of child care, support and retain the child-care workforce, and increase access and supply.”