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Good news for US service members: the Defense Department has announced a 5.4% average increase in the Basic Allowance for Housing (BAH) for 2025.
Some shit you should know before you read: The US military provides the Basic Allowance for Housing (BAH) to active-duty service members to help offset the cost of living off-base when government housing is unavailable. This non-taxable allowance is calculated annually based on rental market data, utility expenses, and housing trends across 299 military housing areas in the US. BAH rates vary by rank, dependency status, and the cost of living in the member’s duty location, ensuring compensation reflects local housing markets. While the allowance typically covers median rental and utility costs, it may not fully cover expenses if service members choose higher-cost housing. BAH is paid monthly.
What’s the deal: According to a news release by the Department of Defense, Basic Allowance for Housing (BAH) rates will increase by an average of 5.4% in 2025, with significant variations based on local housing market trends. In addition, approximately 4% of military housing areas will experience rate decreases, though service members already stationed in those locations will maintain their 2024 rates to prevent financial strain. The Pentagon is anticipating $29.2 billion in BAH payments for 2025.
Summer Britford, the allowance division chief, said, “This is pretty much in line with the same increase we saw between last year’s rates and the previous year, which was around a little over 5% as well. The housing market continues to trend upward consistently this year as it did last year.” She added, “Our goal is to make sure that the overall compensation package remains strong and that it remains competitive. And with BAH being such a huge component of that we are focused on making sure we get it right.”
