Bank of America: Nearly 8% of Families Pay Over $2,000 a Month for Childcare, Double the Share of Three Years Ago

Childcare is now pushing household budgets the way food and healthcare do, and September's price data shows it climbing faster than rent.

Nearly 8% of U.S. families spend more than $2,000 a month on childcare, according to new research from the Bank of America Institute. That includes daycare, nanny services and other programs. The share is more than double what it was three years earlier.

Prices outrunning rent and medical care

Federal labor data show the cost of daycare and school-related fees rose faster in September than other essentials, including rent and medical care, compared with a year earlier.

The Bank of America Institute found families nationwide spent an average of 8% of their monthly incomes on childcare in September. Federal guidelines treat childcare as affordable only when it takes up no more than 7% of household income.

The gap is bigger for people with less money. Lower- and middle-income families spend nearly 9% of annual income on childcare. Higher-income households spend 7.3%.

The math on the 7% line is steep. A family spending $24,000 a year on childcare would need to earn roughly $343,000 to stay under it. The Census Bureau put median household income at $87,460 in 2025.

Wages are not keeping up

Economic Policy Institute economist Elise Gould told CBS News that workers have also seen slowing wage growth, which adds to the pressure on families.

Many are leaning on relatives. Separate AARP research found grandparents provide $172 billion a year in direct financial assistance to their families.

Where costs are rising fastest

In September, median childcare costs rose fastest in Nashville, Tennessee, followed by Jacksonville, Florida, and Phoenix, Arizona, compared with a year earlier, according to the Bank of America analysis.

Bank of America Institute economist Taylor Bowley told CBS News that domestic migration to those metro areas has increased. More families means more demand for childcare, and that is pushing prices up, he said.

A shrinking workforce

Supply is moving the wrong way. Employment in the childcare sector fell 0.7% in September from a year earlier, which makes it harder for providers to deliver services.

"You see job growth falling and price pressures creeping in, leading to a bit of an availability problem," Bank of America Institute senior economist David Tinsley told CBS News.

The researchers also said the lack of affordable childcare falls hardest on women's job prospects. Women are more likely than men to take on childcare duties, according to American Time Use Survey data.

What the numbers leave open

The figures describe a market where demand is rising in fast-growing metros and the number of people working in the field is dropping. That combination typically raises prices, and the September data show it doing so.

The research does not say how many providers have closed or cut capacity, or what pay levels in the sector look like. Those details would show whether the 0.7% employment drop reflects workers leaving for better-paying jobs or providers that cannot afford to staff up.

The Bank of America Institute and Tinsley describe the result as an availability problem. Whether providers can add workers and slots fast enough to bring prices down is the question the next monthly price readings will start to answer.