Child care remains a growing financial burden for many U.S. households, with more families paying more than $2,000 a month, according to a Bank of America Institute report.

Bigger Bills, Fewer Payers

The share of households paying more than $2,000 a month "has more than doubled since 2023," reaching 7.7% in 2026 year-to-date, according to a report by the Bank of America Institute on Tuesday, which uses the bank's payments data and Bureau of Labor Statistics figures.

The median payment rose 1% year-over-year in September, but the number of households paying fell 1%, including a 2% drop among lower-income households. The report said families may be turning to relatives, changing work schedules or leaving the workforce.

Child care averaged 8% of income in September, above the 7% the U.S. Department of Health and Human Services considers affordable, the report added. The average child care payment was 8.6% of lower- and middle-income total households' pay, versus 7.3% for higher-income ones.

Child Care Costs Vary by Metro Area

Child care costs are rising at very different speeds across the country, the report said. Among major metro areas, Nashville posted the fastest year-over-year growth in the median child care payment per household in September, followed by Jacksonville, Fla., and Phoenix. The report said this suggests cost pressures are no longer confined to historically expensive coastal markets.

New York and Washington, D.C., saw the biggest decrease in growth of that median payment. The report said supply may help explain the drop, citing New York City's recent introduction of universal Pre-K as an example.

Policy Efforts and Providers

In New York, Mayor Zohran Mamdani and Gov. Kathy Hochul announced Monday that the city's free 2-K child care program will expand to 17 more school districts in fall 2027, reaching more than 12,000 families.

The program offers free child care and early education, which is full-day and full-year by default. City Council Majority Leader Shaun Abreu said the expansion will give "more 2-year-olds a strong start." The city's broader goal is universal child care for children from six weeks to five years old, according to the announcement.

The expansion covers every borough, including all of the Bronx and Staten Island. It follows a fall 2026 launch in five districts, where families submitted more than 5,700 applications for the first 2,000 seats.

On relatives and stay-at-home parents, Rep. Ro Khanna (D-Calif.) said his Free Childcare for America Act would let "friends, neighbours, aunts, uncles, grandparents" become certified and get paid, and give stay-at-home parents $1,000 a month.

On the provider side, researchers Jessica Brown of the University of South Carolina and Chris Herbst of Arizona State University found private equity-backed providers make up about 10% of the child care workforce and cluster in tight markets and states with looser staffing rules. They found no evidence that private equity is the primary reason child care is unaffordable.