Childcare costs are rising faster than rent, straining U.S. family budgets

October 21, 2026 / 3:51 PM EDT / CBS News

The rising cost of childcare in the U.S. is vying with food prices and healthcare expenses in straining household budgets.

Nearly 8% of families are spending more than $2,000 per month on childcare services, including daycare, nanny services and other programs. That's more than double the share of households that spent that much just three years ago, according to new research from the Bank of America Institute.

In September, the cost of daycare and school-related fees rose faster than other essential expenses, such as rent and medical care, compared to the same period a year ago, according to federal labor data.

Families nationwide spent an average of 8% of their monthly incomes on childcare services in September, BofA found. Under federal guidelines, childcare is considered affordable when it consumes no more than 7% of household income.

Assuming a family spends $24,000 annually on childcare, it would need to earn roughly $343,000 to remain below the 7% threshold. In 2025, median household income was $87,460, according to Census Bureau data.

Lower- and middle-income families spend nearly 9% of their annual incomes on childcare payments, while higher-income households spend 7.3%, according to…

Original source: https://www.cbsnews.com/moneywatch/