Report: For First Time in Years, Home-Based Child Care Programs Are on the Rise

The number of home-based child care programs is seeing a spike for the first time in five years — but experts remain concerned that with a rising child care crisis, there are still not enough programs to meet demand.

According to a report from Child Care Aware of America, the number of licensed home-based child care options increased by nearly 5 percent from 2023 to 2024. There were 98,807 home-based programs open in 2024 across 39 states with available data for the organization. Home-based programs hit their peak number in 2020 at 99,958, then dropped until 2024, when the numbers began to rebound.

But the increase was buoyed by a small number of states — California, Massachusetts and Virginia — that each had more than a 10 percent increase in in-home care options. The majority of states (29 of the 39 with available data) saw the number of home-based programs drop.

The trend follows similar patterns for early childhood education in general, where a small number of states heavily bolstered the overall investment into the sector.

California invested in giving child care providers health care and retirement benefits, which is rare; Massachusetts has been a pillar for child care investment, notably through a state program called Commonwealth Cares for Children that provides monthly stipends for child care workers; and Virginia has invested heavily in early childhood education in recent years, including a child care subsidiary program and pre-K initiative.

But Sandra Bishop, senior director of research at Child Care Aware of America, said it does not appear those initiatives will cause a larger domino effect across other states’ own investments.

“I don't know of any talks at that level; you’d hope states would see the investment works, but it’s not clear if that would happen,” Bishop says.

Bishop pointed out Virginia's initiative will be ending this year after its five-year stint, causing potential concern about the implications for the number of child care programs.

“Up until this point there's been a steady decrease in all states [for child care programs] so unless states do more, the reasonable thing to predict would be a continued drop,” Bishop says. “It’s a concern for sure. And the other piece in play is a lot of states got COVID relief funding and they put that into child care. And now that funding has dried up so we may see the impact of lack of additional funds.”

The lack of sufficient child care programs is compounded by the rising cost of child care for families. According to the report, costs for child care increased by 29 percent, for an average of $13,128 a year, between 2020 and 2024. That is roughly 7 percent more than in 2020 after being adjusted for a five-year inflation.

“Some states stand out for increasing investments, but it seems we've known for a while now it costs a lot, and it hasn't gone down at all despite best efforts,” Bishop says.

According to the report, child care costs more than mortgages in 45 states plus the District of Columbia. And in 41 states plus the District of Columbia, child care costs more than in-state college tuition.

Child care is most costly in the Northeast, according to the report, clocking in at an average of $34,656. It was the most inexpensive in the South, at $23,566 — or more than double the average in-state college tuition costs in the region.

Bishop also points toward the “odd paradox” that while child care is notoriously costly, child care workers are among the lowest paid in the nation. According to the report, the average child care worker makes $33,140 annually — which means it would take 44 to 100 percent of a child care worker’s wages to send two of his or her own children to child care.

“You have this situation of parents paying a lot for child care, but [child care workers] are not making a living wage,” Bishop says.