Rising costs for child care—up by 5.2 percent year over year in September—have some parents leaving the workforce or cutting back on hours to take care of their children, a new report from the Bank of America (BofA) Institute found.

The report, published on Oct. 28, states that child care costs outpaced inflation by 1.5 percent in September. As a result, the year-over-year growth in households making child care payments slowed, down by 1.6 percentage points from September 2024.

BofA analyzed card payment data from across the country and found that payment amounts rose most in America’s heartland, surging by 8.2 percent in September versus the same month in 2024. Child care payments in New England were up by 6.6 percent.

On average, the BofA report found, child care costs rose most rapidly in a handful of large Southern cities. Nashville recorded the highest year-over-year growth in child care payments at 6 percent, followed by Columbia, South Carolina, at more than 5 percent and Atlanta at more than 4 percent.

As costs rise, more parents—particularly in lower-income households—are staying home to provide care, BofA stated.

The share of households that pay for monthly child care and have more than one source of income has dropped to about 35.5 percent year-to-date, the institute’s internal data show.

According to the Labor Department, U.S. families spent between 9 percent and 16 percent of their median income on day care. Full-day day care costs for 2022 (the most recent data set available) ranged from $6,552 to $15,600 per child.

Child care costs are often higher in major metropolitan areas. Technology platform Tootris, which matches parents with day care providers, found that the average annual cost of infant care at licensed child care centers across California was nearly $20,000 for one child. In the state, monthly costs were higher than $3,000 in Los Angeles, San Francisco, San Jose, Oakland, and Long Beach, while San Diego and Anaheim were just shy of that number.

Washington state also has some of the most expensive rates for child care, advocacy group Child Care Aware reported. Average costs for day care in the state accounted for 15.4 percent of median income for married couples and up to 51.4 percent of median income for single mothers, the group found.

Median costs in 2024 for child care in King County, where Seattle is located, were nearly $30,000 annually for infants and dropped to about $22,000 for preschoolers, Child Care Aware reported.

The Department of Health and Human Services pegs day care as affordable if it costs 7 percent or less of a family’s annual income, including any federal child care subsidies. However, costs for day care for just one child often exceed monthly rental payments for many families.

The ongoing government shutdown could place families who rely on Head Start programs for child care subsidies in difficult financial situations. Three states missed Head Start funding in October, and more than 40 states will not receive the funding if the shutdown drags on past Nov. 1, First Five Years Fund reported.

Families in New Mexico will get some relief beginning in November, when the state’s Universal Child Care program goes into effect.

The state will offer no-cost child care by eliminating income limits, removing copays, and expanding eligibility requirements, the state’s Early Childhood Education and Care Department said. Children must be legal U.S. residents or qualified immigrants to participate in the program, the agency stated.