Housing and childcare are typically the two largest budget items for young families, and the choice of exactly where to live – even within a larger metro area – can result in substantially higher or lower costs. Zillow teamed up with childcare website Care.com to explore how much families can save (or expect to spend) on housing and childcare by moving from the city to the suburbs.
Housing and childcare are typically the two largest budget items for young families, and the choice of exactly where to live – even within a larger metro area – can result in substantially higher or lower costs. Zillow teamed up with childcare website Care.com to explore how much families can save (or expect to spend) on housing and childcare by moving from the city to the suburbs.
We compared data on housing and childcare costs in urban and suburban communities for 30 metro markets nationwide. In 14 of these, the suburbs are substantially (more than 5 percent) cheaper than the city; in 12 metros, the urban core is substantially (again, more than 5 percent) cheaper. In the remaining four metros – Birmingham, Los Angeles, New Orleans and San Jose – there are only very small (less than 5 percent) differences in housing and childcare costs between urban and suburban areas (figure 1).
In the San Francisco area, for example, a family will spend an extra $1,047 per month on combined housing and childcare costs to live in an urban ZIP code relative to a suburban ZIP code. In New York, the monthly suburban savings add up to a staggering $5,936. In other markets – including Philadelphia ($1,155 per month), Baltimore ($899 per month) and Cleveland ($753 per month) – families will spend less on housing and child care living in the city relative to the suburbs (figure 1).
More insight into metro-level childcare data from Care.com can be found here.
We classified zip codes into urban and suburban communities based on Zillow’s custom classification model, then computed a median home value for each of these communities. We then calculated monthly housing costs, assuming a 20 percent down payment on the median-valued home and a 30-year fixed mortgage rate of 4 percent at the end of 2016. Care.com then provided childcare costs based on rates listed in care.com child care center profiles in 2016 for two children in the same center. Weekly rates were multiplied by 52 weeks, and monthly rates were multiplied by 12, to calculate annual rates. The hourly rate for nanny care is multiplied by 40 hours and 52 weeks to find an annual rate.
