As the cost of living increases and personal values shift, having children is no longer a priority for nearly half of U.S. adults. A Pew Research Center poll showed that from 2018 to 2023, the percentage of adults who said they are unlikely to ever have children increased from 37% to 47%. There may be some surprising financial benefits for those who choose not to have kids.
The average cost of raising a child from birth through age 17 is $233,610, or $13,742 annually, according to the U.S. Department of Agriculture. For child-free couples, especially double-income households prioritizing economic opportunities over parenthood, the road to homeownership may become significantly faster. DINKs (dual income, no kids) could allocate money that might otherwise go toward child-related expenses to saving for a down payment instead, thus speeding up the savings timeline.
To explore how down payment savings timelines are influenced by having children, and to account for various financial situations, Zoocasa calculated two scenarios. In scenario one, we assumed couples already had an average savings of $103,140 (without children) and $73,890 (with children), based on Federal Reserve data, and saved 4.4% of their annual income, consistent with the U.S. Bureau of Economic Analysis’ reported savings rate. For couples with children, $13,742 in annual childcare costs (the average annual cost based on data from the U.S. Department of Agriculture) were deducted from their income to estimate savings.
In scenario two, couples were assumed to start with no savings. Parents with children saved 4.4% of their income after deducting childcare costs, while couples without children redirected $13,742—the amount typically spent on raising a child—toward their down payment savings.
Years to Save for a 20% Down Payment Varies Widely Between Families
Child-free couples have a significant financial advantage over couples with kids, especially since couples without kids have an average of $29,000 more in their savings accounts. The average $103,140 a child-free couple has in their savings is enough to cover the 20% down payment on a median-priced home in 35 cities. These include Phoenix, Orlando, and Austin.
Conversely, the $73,890 a couple with kids on average has in their savings is enough to cover the 20% down payment in just 17 cities, such as Detroit and Pittsburgh. Despite median incomes for couples with children being higher than child-free couples in most cities, the annual cost of childcare exacerbates most families’ ability to save for a down payment. For instance, in Chicago, couples with children have an average household income that is $13,127 higher than child-free couples, however after subtracting annual childcare costs the couples have nearly the same income.
It also doesn’t help that in 15 cities the 20% down payment is over $100,000. In San Diego, San Francisco, and San Jose it is over $200,000. In more expensive cities like these, a family’s ability to save for a down payment is strained that much more, especially when taking into account the higher costs of groceries, transportation, and services.
However, in America’s most expensive cities, child-free couples still face barriers to entering the housing market. Child-free couples will need to save for 16.8 years to afford the 20% down payment of $189,500 in Los Angeles, and while this is 10 years faster than couples with children, it still represents a noticeably long savings timeline. This timeline is extended drastically for couples with children who have not already established a down payment savings account, bringing their required years to save to 42.7 years.
Child-Free Couples Can Save for a Down Payment Twice as Fast as Couples With Children
On average, child-free couples can save for a down payment 12.2 years faster than couples with children. Furthermore, in 84% of analyzed cities, a child-free couple can save twice as fast as a couple with children for a down payment.
The savings timeline difference is most apparent in Providence, RI, and Miami, FL. Child-free couples can save for a 20% down payment in 7.7 years in Providence and 9.2 years in Miami, while it takes couples with children nearly 30 years longer in both cities. This gap can largely be attributed to the fact that child-free couples in Miami and Providence earn, on average $10,000 more annually than couples with children.
However, child-free couples living in more affordable regions of the U.S. will feel the financial benefits more. In 13 cities, child-free couples can save for a 20% down payment in under 5 years. Cities like Cleveland, Pittsburgh, and Oklahoma City are among the most affordable, thanks to their low median home prices.
In contrast, couples with children (without savings) will need to save for 9.9 years in Pittsburgh, 11.9 years in Oklahoma City, and 13.4 years in Cleveland. Besides Pittsburgh, the only other city where couples with children (without savings) can save for a down payment in under 10 years is St. Louis. Among all 50 cities analyzed, the average time to save for a down payment for couples with children is 19.5 years (with no savings).
Where Can Families with Kids Afford to Live?
Although the savings timeline is long for families with children, this doesn’t mean families cannot afford a house. Couples with children could first opt for a smaller home, one that is priced below their city’s median price, and build equity for a few years before moving up to a larger house. For couples with babies or infants, a condo could also be a good starting point, as they are typically much more affordable.
Couples could also adopt a more aggressive savings strategy, or try to reduce child-related expenses, to save for a down payment faster. Alternatively, if couples can build up their savings before having children, this will better position them to afford a median-priced home. Houston, Indianapolis, and Memphis have 20% down payments that are under $70,000, offering those with smaller budgets a more affordable entry point to the market.
Lastly, those planning to have children should carefully consider their long-term financial goals and priorities. Would you rather get a starter home and then have a baby? Or would you rather wait to have children until you have moved into your forever home? Would you be comfortable renting while your children are young to save money? There’s no right answer to how and where to live, but understanding your priorities and the costs associated with raising a child, can better help you decide and plan for your future.
With all this in mind, you can create a balanced plan that supports your family goals while maintaining financial stability. For expert insights on real estate planning as you grow your family, contact an agent at Zoocasa today.
Methodology:
This study analyzed the time required for couples with and without children to save for a 20% down payment on a median-priced home in the 50 largest U.S. metropolitan statistical areas (MSAs).
To estimate the years needed to save for a down payment, we assumed couples saved 4.4% of their household income annually, in line with the U.S. Bureau of Economic Analysis’ reported savings rate. For couples with children, the analysis also accounted for childcare costs, which were deducted from household income before calculating the annual savings rate. Household income data was sourced from the U.S. Census Bureau. Average annual childcare costs were sourced from the U.S. Department of Agriculture “Expenditures on Children by Families, 2015.
To estimate the additional years needed to save for a down payment, we assumed couples already had an average savings of $103,140 for those without children and $73,890 for those with children, based on data from the Federal Reserve’s Survey of Consumer Finances.
