U.S. Renters Spend Almost as Much on Child Care as they Spend on Rent

SAN FRANCISCO, Aug. 29, 2018 /PRNewswire/ -- More than a third of renters have kids at home,ⁱ and may find themselves balancing the rising costs of raising a family with the rising costs of renting a home or apartment.

According to a new HotPads® analysis, U.S. renters with children spend almost as much on child care as they spend on rent. The average cost of child care in the U.S. is $1,385 a month, according to a HotPads analysis of Care.com's Care Indexⁱⁱ. Nationally, the median rent payment is $1,500 per month -- $115 more than the monthly average cost of child care.

However, monthly child care costs exceed monthly rent costs in more than a quarter of the 48 metros analyzed. Renters in Pittsburgh can expect to spend $255 more each month on child care than they do on rent, more than any other metro analyzed.

In other less expensive rental markets, including Memphis, Tenn.; Louisville, Ky.; Oklahoma City, Okla.; and Buffalo, N.Y.; renters with children can expect to spend $155 or more on child care each month than they do on rent.

The cost of living is on the rise across the country, and that is reflected in both rental prices and child care costs. Over the past year, median rent across the U.S. rose 2.3 percent, while the average cost of child care rose 1.3 percentⁱⁱⁱ.

"As rents and child care costs march steadily higher, keeping up with these rising costs may be one of many factors keeping parents up at night," said Joshua Clark, economist at HotPads. "Rent appreciation has slowed from recent highs, but as the economic recovery matures, child care costs will likely continue to rise. For renters with young children in child care, that means any potential savings from softer rent appreciation could quickly be eroded by higher childcare expenses."

In expensive rental markets like San Jose, San Francisco and Los Angeles, rent prices are higher than child care costs. However, even in these hot markets, the average cost of child care is half the median monthly rent payment. The combination of high rents and high child care costs can put additional financial strain on families with young children – renters in these markets can expect to spend more on rent and child care combined than in any other metros analyzed.

Rising rents have more of an impact on renters with children who want more space, as monthly rent for two and three-bedroom rentals are rising faster than one-bedroom rentals nationwide –median rent for two and three-bedroom rentals rose almost 3 percent over the past year, while median rent for one-bedroom rentals rose about 2 percent.

According to the 2017 Zillow Group Consumer Housing Trends Report, renters with kids are more likely to prioritize the number of bedrooms and square footage in a rental when looking for a place to live.

HotPads is a Zillow® Group-owned apartment and home search platform for renters in urban areas across the United States. For more information on the U.S. rental market, visit HotPads.com.

HotPads

HotPads is an efficient rental search platform for urban areas across the United States, with features designed for competitive markets such as map-based search, real-time notifications and detailed information on landlords and property managers that help renters spend less time searching and more time feeling excited about their next home.

Launched in 2005, HotPads is based in San Francisco and is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG).

HotPads is a registered trademark of Zillow, Inc.

ⁱ More than a third of renters live with children under the age of 18, according to the 2017 Zillow Group Report on Consumer Housing Trends.
ⁱⁱ For this analysis, HotPads analyzed child care costs in the U.S. and 48 metro areas using data from Care.com's Care Index and the U.S. Census Bureau. Average child care costs were calculated using Care.com data on at-home and in-center child care costs, then weighted and adjusted for inflation to July 2018 levels using data from the U.S. Census Bureau.
ⁱⁱⁱ Data from the Bureau of Labor Statistics, July 2018
^iv Calculated using Care.com data on at-home and in-center child care costs and weighted and adjusted for inflation to July 2018 levels using data from the U.S. Census Bureau
^v Negative numbers indicate markets where child care is more expensive than rent.

SOURCE HotPads

Related Links

http://hotpads.com

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