• Homebuyers with kids will likely spend 66% of their income on a mortgage and childcare this year.
• Parents in Los Angeles and San Diego can expect to spend as much as 121% and 113%, respectively.
• Some Californians have moved across the country to afford to buy a home.

Thinking about buying a home this year with kids already in the picture? Get ready to dig deep.

A recent study from Zillow found that potential homebuyers with children are likely to spend 66% of their income on mortgage payments and childcare expenses — an increase of nearly 50% from 2019. 

The real-estate company estimated city- and state-level childcare costs from 2009 to 2022 for the typical American family with 1.94 children by analyzing data from the Women’s Bureau of the US Department of Labor and advocacy group Child Care Aware.

According to Zillow’s analysis, in 31 of the largest 50 US metropolitan areas with available childcare cost data, families looking to buy a home can expect to spend more than 60% of their income on mortgage and childcare costs.

Some areas are even costlier, with parents in cities like Los Angeles and San Diego needing to dedicate as much as 121% and 113%, respectively. (In those areas, the cost of buying a typical home and childcare is so big relative to the median income that Zillow’s calculation results in figures over 100%.)

Zillow determined that a family earning a median household income of $6,640 per month can expect to allocate $1,984 of that to childcare. If the family purchased a house at a 6.61% interest rate — the rate in early January, when the US Department of Labor released its latest data on childcare costs — and made a 10% down payment, their monthly mortgage would amount to $1,973.

That leaves just $2,683 for additional expenses like food, transportation, and healthcare. This means many households with kids are financially strained; they’re likely spending more than 30% of their income on housing, well above what experts recommend.

It all adds up to a costly reality that’s making the American dream of homeownership seem farther out of reach for parents than ever before.

Parents can blame a yearslong battle with inflation, as well as stubbornly high home prices and mortgage rates, for contributing to their predicament.

Based on the study, a new buyer household in the United States, making the median income, would spend 30% of it on housing. It’s paying for childcare, then, that adds so much on top of the housing budget.

The upshot: Another group, less encumbered financially, appears better poised to realize the dream of homeownership: “DINKS,” an acronym that stands for “dual income, no kids.”

Some child-free DINKS — who boast a median net worth above $200,000 according to the Federal Reserve‘s Survey of Consumer Finances — devote their disposable income to luxuries like boats and expensive cars.

Without the financial obligations of raising children, such as covering medical expenses or enrolling them in daycare or private school, DINKS can save thousands of dollars a year and build greater long-term wealth.

Some DINKS use their savings to finance vacations and travel the world, like Elizabeth Johnson and her husband, who, over the past couple of years, have hiked in the Swiss Alps, snorkeled in Hawaii, and enjoyed leaf peeping in Canada.

“We hang out with other people’s kids every once in a while,” Johnson previously told Business Insider’s Bartie Scott and Juliana Kaplan, “but then we happily just give them back to their parents.”

Some Americans with kids move to places where their money goes further

One solution to the high cost of both buying a home and raising a family?

Move.

In recent years, young Americans in higher-cost states have decided to move to places that offer them a cheaper cost of living.

Janelle Crossan moved to New Braunfels, Texas, from Costa Mesa, California, in 2020 following a divorce.

She was able to become a first-time homebuyer and found a safe community to raise her son.

“I paid $1,750 for rent in a crappy little apartment in California,” Crossan told BI earlier this year. “Now, three years later, my whole payment, including mortgage and property taxes, is $1,800 a month for my three-bedroom house.”

Courtesy of Pengyu Cheng

Pengyu Cheng, a program manager for a tech company, told BI in 2023 that moving from California to Texas allowed him and his wife to afford their first home, giving them the confidence and security to have their first child.

“Living in California has always been expensive,” Cheng said. “I knew that when my wife and I eventually expanded our family, we wouldn’t be able to afford San Francisco or the Bay Area in general — even though we both earn good salaries.”