Have kids? Good luck buying a house this year

Homebuyers with children are being boxed out of the housing market

Families with kids are being boxed out of the increasingly unaffordable U.S. housing market as the cost of both a new mortgage and child care soar higher. 

A recent study published by Zillow found that potential homebuyers with children are likely to spend 66% of their income on monthly mortgage payments and child care, a sharp increase from about 50% in 2019.

The typical American family can expect to spend about $1,984 per month on child care and $1,973 on a monthly mortgage payment (based on an interest rate of 6.6%). With the monthly median household income hovering around $6,640, that leaves just $2,683 for other necessary expenses, including food, health care, insurance, transportation, retirement savings and education.

Home for sale in Cupertino, California

A home for sale in Cupertino, California, on Feb. 7, 2024. (Photographer: Loren Elliott/Bloomberg via Getty Images / Getty Images)

The general rule of thumb is that housing should cost no more than 30% of a person's monthly income, while the Department of Health and Human Services recommends that families spend no more than 7% of their income on child care expenses.

But the typical household exceeds these guidelines in every market that Zillow analyzed, a trend that underscores how far out of reach the American dream has become for millions of families.


In fact, in 31 of the largest 50 metropolitan areas with available child care cost data, families looking to buy a home can expect to spend more than 60% of their income on their mortgage and child care expenses.

The cost burden is even worse in some parts of the country. Parents in Los Angeles and San Diego would need to dedicate a respective 121% and 113% of their income to pay for child care and a mortgage. In both Boston and Seattle, families would need to spend 92%.

A classroom in Wisconsin

A classroom at The Growing Tree Academy in New Glarus, Wisconsin, on Sept. 13, 2023. (Photo by Matthew Ludak for The Washington Post via Getty Images / Getty Images)

Housing affordability is the worst it's been in decades, thanks to a spike in home prices and mortgage rates. Combined, the two have helped to push the typical portion of average wages nationwide required for major homeownership expenses up to 33%.

There are several reasons to blame for the affordability crisis.


The Federal Reserve's aggressive interest-rate hike campaign sent mortgage rates soaring above 8% for the first time in nearly two decades last year. Rates have been slow to retreat, hovering near 7% as hotter-than-expected inflation data dashed investors' hopes for immediate rate cuts.

The average rate for a 30-year fixed loan rose to 6.77% last week, Freddie Mac reported, well above the pandemic-era lows of 3%.

Even though mortgage rates are nearly double what they were three years ago, home prices have hardly budged. That is largely due to a lack of available homes for sale. Sellers who locked in a low mortgage rate before the pandemic began have been reluctant to sell, leaving few options for eager would-be buyers.

"This rapid home price appreciation, coupled with mortgage rates that recently hit decades-long highs, means many home buyers must make trade-offs in order to afford other necessary expenses, such as child care," the Zillow analysis said.