Americans’ cost of living remains a massive headache, even as recession fears fade

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Instead of achieving the American dream, young Americans are kept awake at night by budget-breaking costs of living. Despite boomy economic indicators that show inflation is cooling and the economy is growing at a shockingly strong pace, life is still far too expensive for far too many.

Parents are making difficult choices to afford child care , or they’re opting to evade it by dropping out of the workforce altogether. The weekly price of day care for a toddler surged 9% in 2023, according to Care.com. The rate for infants spiked 13%, while the already expensive option of a nanny has also gotten more expensive. Parents are also struggling to buy bigger cars to haul around their growing families while simultaneously socking away some money in college savings plans. The average transaction price of a new car has jumped nearly $12,000 in the past five years, according to auto website Edmunds.

Housing is often the biggest expense for families, but in today’s market, housing is swallowing up an uncomfortably large chunk of family budgets. As of February, it took about 34% of the median household’s monthly income to cover the principal and interest payments on a median-priced home, according to research from the Intercontinental Exchange. This metric of housing affordability recently hit the highest level since 1984 , though it has eased a bit as mortgages backed away after touching 8% in October. Still, at nearly 7%, mortgage rates remain elevated .

Even some of those lucky enough to have bought a home in recent years are now stressing out about how to pay for it. One 33-year-old tells CNN that she and her husband are struggling to make their $3,400-a-month mortgage payment along with the cost of a nanny and a new car: "I fear we may never be able to have a second child...because we can’t afford one."

?? Read the full story and see why experts say homeowners have 38 times more wealth than renters.

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