A typical working family spends more than half of its annual income on housing and childcare, though that share rises to 97% in Los Angeles, Redfin said Monday.
Redfin compared the annual cost of buying a home and arranging childcare for one child with the median household income for the 100 largest metros in the US. Redfin used Winnie for childcare data.
Housing and childcare costs consume 52% of median earnings nationwide, the report showed. Working families in Little Rock, Arkansas, have the lowest share at nearly 40%, while households spend nearly all, or 97%, of their annual income on housing and childcare in Los Angeles, California.
Seven of the 10 least affordable metros are in California amid high home prices, while New York is ranked second on that list, Redfin said. Midwest and Southern metros are the most budget friendly due to affordable home prices and daycare.
"High-income metros like San Francisco and San Jose offer bigger paychecks, but those gains are often offset by extraordinarily expensive homes," Redfin Senior Economist Yingqi Xu said. "Meanwhile, markets with more affordable housing give working parents far more financial flexibility, even when local incomes are lower."
The median US home price has doubled and childcare expenses have soared by 40% in the last decade, Redfin said.
"Families considering a move should weigh both of those big costs -- as well as job opportunities -- when deciding where to put down roots," Sara Mauskopf, chief executive of child care marketplace Winnie, said. "Families should also make sure childcare is actually available near where they want to live. If care is scarce or unaffordable, an otherwise affordable area may not be a practical place for a family with young children."
Last week, National Association of Realtors data showed that existing home sales in the US fell more than expected last month as rising prices and mortgage rates continued to weigh on homebuying activity.
