The income a family needs to live comfortably – and the 10 most affordable US states to raise children

No joke: Homebuyers with children are becoming less and less common.

In fact, just 27% of recent buyers had a child under the age of 18 living with them, which was an all-time low, according to the National Association of Realtors ® 2024 Profile of Home Buyers and Sellers.

This percentage is down from 30% last year and 58% in 1985.

“As home prices rise, people may be waiting longer to buy a home and may be waiting longer to have children, too,” says Brandi Snowden, director of member and consumer research at NAR.

The income needed to buy a median-priced home in the U.S. is much higher than the typical household’s take-home income, says Hannah Jones, senior economic research analyst at Realtor.com.

“This means that it is challenging at best and unattainable at worst for the typical American family to buy a home. Child care costs and other child-related expenses take away from the amount a family can spend on a monthly mortgage payment, which can prevent some families with children from buying a home in today’s market, she says.

Jones adds that many of today’s buyers may be past their child-rearing years — but it’s also possible that younger families are looking to buy a home before they have kids.

“In other words, families can secure a home first, then have children, meaning more buyers would be childless at the point of purchase. However, the increasing age of home buyers suggests that there are fewer young buyers in the market today due to the high costs of buying a home.

The estimated cost of raising two children from birth to age 17 (including the cost of a four-year public college) is about $832,200, according to Investopedia. The average monthly cost of full-time, center-based child care for two children averages $2,182, LendingTree recently found.

“I’ve lost dozens of deals over the last few years because clients slowly dropped out of the market,” says Jameson Tyler Drew, president of Anubis Properties, in the Los Angeles area. “Worse still, I’ve sold houses to former buyers who suddenly realized they couldn’t afford to live in our town anymore because they just had a baby and couldn’t afford childcare.”

Many parents these days are so upset that they can’t afford a house and childcare, they’ve taken to TikTok to vent their frustrations.

TikToker Howdy_Shannyn says she spends $506 a week for two kids in day care. That’s $2,024 a month.

@howdy_shannyn

#stitch with @The Social Beaches who else feels like they have to choose between having a house and having a family? Between flat wages, insanely expensive homes, and childcare costs that are absolutely debilitating, many of us have the difficult choice of deciding between starting a family and buying a home. I have heard this feeling so many times watch my videos. Someday after the kids are grown we’ll be able to buy a house, but the American dream of getting married and buying a little starter house with a white picket fence and then having two or three kids is gone . Our daycare costs aren’t even the worst out there, but they are still very expensive. I support people choosing to be childless, but it doesn’t really feel like a choice when so many people are excluded from an equal choice when money is the biggest factor in that decision. I hate that for this generation and for the future, home ownership or raising children is becoming a privilege of the rich. inflation2inflation2023cinflationkrisisetiredmillenvjecarebrokemillenialetiredmillenvjecarnenekte economy???g#corporategreed

♬ original sound – howdy_shannyn

“When people ask me when we’re going to buy a house, the answer is not until the kids are out of day care, if ever,” she says. The cost of daycare – plus a $2,500 minimum mortgage is absolutely unaffordable for my family.

Many of her followers are choosing between owning a home or having children because they believe they can’t do both, she says.

“A close friend of my wife quit her job as a full-time nurse to stay home and raise the kids because it was cheaper than getting a job and sending them to daycare every day of the week,” says Drew, adding that day care in Los Angeles often costs about $2,000 per child, per month. “For most families, this is essentially a second mortgage.”

Parents, children and the real estate market

Are homeowners with young children disappearing? We asked real estate agents from around the country for their thoughts on the matter.

“Our brokerage is definitely operating with fewer people with children than we used to. When interest rates started to rise in 2022, a lot of small families were priced out of the market,” says Andrew Fortune, who runs Great Colorado Homes Real Estate Brokerage in Colorado Springs.

And for parents who managed to buy property, they often struggle to afford it.

“In Colorado Springs, being ‘house poor’ is definitely a thing,” Fortune says. “This is becoming such a common conversation with customers that it gets depressing at times.”

“A lot of non-homeowner parents are renting,” says real estate broker Samantha Sousa, of Sousa Valley Real Estate in Tulare, CA. “The rent payment is higher than the average mortgage, but they are unable to save for closing costs to buy a home. Additionally, they are unable to afford groceries, medical care, and childcare. the children.

Another reason fewer homebuyers have children under 18 may be that they can’t afford to move out of their starter homes, says Sam Fitz-Simon, a real estate agent with Compass in Danville, CA.

“People are holding on to a home they previously bought for more than expected, just to keep the payments affordable,” explains Fitz-Simon. “The clients I’ve worked with in the past year have basically been bursting at the seams — stalling as long as they can before making the decision to go upstairs.”

That’s why Nikki Beauchamp, an associate broker with Sotheby’s International Realty in New York City, urges her clients to plan ahead.

“When my clients are buying, I often suggest that they think about what life might look like in the next seven to 10 years,” she says.

If her clients plan to start or expand their families, Beauchamp says, it changes how they view the use of spaces. For example, can a dining room become a bedroom at some point?

Real estate agents in big cities may see fewer clients with young children because families are moving out of state to get more bang for their buck, according to Cara Ameer, a real estate agent with Coldwell Banker in Ponte Vedra Beach. , FL.

“Many prospective buyers want to see where their money will go in places with more affordable homes or a good supply of new construction,” she says.

The 10 most expensive countries to raise children

In the 10 most expensive states to raise children, parents often have to cut corners, live paycheck to paycheck (even on six-figure salaries) and tread water instead of getting ahead.

Drew says young people are the lifeblood of most big cities, but many simply can’t afford to live there anymore — especially when you add kids to the mix.

SmartAsset recently calculated the income a family of four (two adults and two children) needs to live comfortably in every state in America.

The results were both eye-opening and surprising. They used the 50/30/20 budget rule, which recommends spending 50% of your income on basic needs like food and shelter, 30% on necessities, and 20% on savings or paying off debt.

1. Massachusetts

Median home price: $769,500
Required salary for two working adults raising two children: $301,184

2. Hawaii

Median home price: $798,500
Required salary for two working adults raising two children: $294,612

3. Connecticut

Median home price: $499,994
Required salary for two working adults raising two children: $279,885

4. New York

Median home price: $649,775
Required salary for two working adults raising two children: $278,970

5. California

Median home price: $759,500
Required salary for two working adults raising two children: $276,724

6. Colorado

Median home price: $595,000
Required salary for two working adults raising two children: $264,992

7. Washington

Median home price: $644,450
Required salary for two working adults raising two children: $257,420

8. Oregon

Median home price: $569,950
Required salary for two working adults raising two children: $257,338

9. New Jersey

Median home price: $574,500
Required salary for two working adults raising two children: $251,180

10. Rhode Island

Median home price: $549,950
Required salary for two working adults raising two children: $249,268

The 10 least expensive states to raise children

In less expensive states, parents usually have little room in their budgets to afford things like dance lessons, braces, and family vacations.

That’s why many parents are fleeing expensive states like California for cheaper places like the Midwest, according to Drew.

1. Mississippi

Median home price: $294,950
Required salary for two working adults raising two children: $177,798

2. Arkansas

Median home price: $296,854
Required salary for two working adults raising two children: $180,794

3. West Virginia

Median home price: $245,000
Required salary for two working adults raising two children: $189,364

4. Louisiana

Median home price: $276,438
Required salary for two working adults raising two children: $189,612

5. Kentucky

Median home price: $299,950
Required salary for two working adults raising two children: $190,112

6. South Dakota

Median home price: $372,500
Required salary for two working adults raising two children: $192,608

7. Alabama

Median home price: $329,200
Required salary for two working adults raising two children: $193,606

8. Oklahoma

Median home price: $295,000
Required salary for two working adults raising two children: $194,106

9. Tennessee

Median home price: $427,450
Required salary for two working adults raising two children: $195,770

10. Kansas

Median home price: $295,475
Required salary for two working adults raising two children: $196,768