:max_bytes(150000):strip_icc()/GettyImages-2217233469-65a8ce3ac154405298baadcf0bd0dd16.jpg "The Challenge of Home Buying and Child Care Costs")
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Key Takeaways
- The 28/36 rule states that no more than 28% of your gross household income should go toward housing, and no more than 36% of your gross household income on housing, child care costs, and all debt.
- Child care costs an average of $989 per month, while the average price of a mortgage is $2,127 per month.
- Child care and mortgage costs take up about 45% of the average household income ($6,977.50), which is well above the 28/36 rule of thumb.
As costs continue to rise, determining how much of your income should go to pay for housing versus child care can be challenging.
One rule of thumb states that no more than 28% of your gross income should go toward housing, and no more than 36% for housing plus all your debts, as well as child care costs. But are most families able to make this happen?
How Much You Should Spend On Housing
For many people, housing costs are their largest monthly expense, but you may wonder if you’re paying more than you should based on your income.
The 28/36 rule can help you determine if you’re overspending on housing. Mortgage lenders and financial experts recommend spending no more than 28% of your monthly gross income on housing, and no more than 36% of your monthly income on housing, child care, and debt.
For example, if your household brings in $6,977.50 a month before taxes (the median income in the U.S. divided by 12), you shouldn’t be spending more than 28% of that, which is $1,953.70, on housing per month.
However, the mortgage for a median-priced home at a 6.36% interest rate with a 10% down payment costs $2,844 per month, and renters pay an average of $2,095 per month.
$439,701
The median cost of a house in the U.S. as of October 2025 was $439,701.
Considering Your Childcare Costs
Under the 28/36 rule, no more than 36% of your gross income should go towards your housing, child care, and debts. If we use our previous example—that is, your household makes $6,977.50 a month—then no more than $2,511.90 of your monthly income should go towards housing, child care, and debts, like student loan payments, credit card bills, and auto loans.
The 28/36 rule appears easy to follow until you realize how much child care costs have risen in the U.S. Here’s what families typically pay.
| 2025 Childcare Costs | |||
|---|---|---|---|
| Average Infant Child Care Cost per Month | Average Child Care Cost per Month | Percentage of Income Spent on Infant Child Care Costs per Month | Percentage of Income Spent on Child Care Costs per Month |
| $1,233 | $989 | 14.38% | 11.61% |
Factoring in Other Debts
Let’s use our previous example of a monthly household income of $6,977.50. If we subtract the maximum allowed housing expense ($1,953.70, or 28%) from the 36% ($2,511.90), you’re left with just $558.20 a month to cover child care, credit card bills, auto loans, student loans, and any other debts. That’s not a lot to work with.
If you were paying the average mortgage of $2,844 per month, the average child care costs of $989 per month, the average auto loan cost for a used vehicle of $521 per month, and the average student loan cost of $536 per month, your housing, child care, and debt costs would be $4890, which is over 70% of the average income—well over the recommended 36%.
Also consider that many families have two vehicles, two student loan payments, plus credit card debt (the average is $181 per month). If you add those in, the costs that are supposed to not exceed 36% come to 88%.
No wonder so many Americans are struggling.
