Troops to Receive Over 5% Average Housing Allowance Increase in 2025

     

Basic Allowance for Housing Rates to See an Average Increase of Approximately 5.4% 

Defense officials announced Friday that service members will receive an average 5.4% increase in their Basic Allowance for Housing (BAH) in 2025, with the new rates taking effect on January 1.

While the average increase matches the 2024 rate, it does not guarantee that every service member will see the same amount added to their accounts.

For instance, an E-5 with dependents stationed in the Copperas Cove area near Fort Cavazos, Texas, will see a 12.8% increase in BAH, which translates to $180 more per month compared to 2024. An E-5 without dependents, on the other hand, will receive a 9.8% increase, or $129 more each month than last year.

In areas where BAH rates are set to decrease, service members stationed there will not face a penalty. Instead, they will continue to receive the same amount of BAH as they did in 2024.

Service members can view the updated 2025 BAH rates by entering their ZIP code and rank into the Defense Department’s BAH tool.

For service members living in privatized housing, rent will remain equal to the BAH rate, meaning privatized housing landlords will receive the increased payments.

Defense officials estimate that $29.2 billion will be allocated for housing allowances for approximately 1 million service members in 2025.

Rising housing costs in recent years have placed a significant financial strain on many service members. In 2023, defense officials implemented the largest year-over-year increase in at least 15 years, raising BAH rates by an average of 12.1%.

BAH rates are set based on annual rental housing cost data for various types of residences across 299 military housing areas in the United States, including Alaska and Hawaii.

Determining BAH rates involves collecting data and input from a variety of sources, including the U.S. Census Bureau, the Bureau of Labor Statistics Consumer Price Index, commercial rental markets, leading online rental listing websites, military services, and local military installation housing offices.

BAH calculations take into account the median current market rent and average utility costs for six different types of dwellings in each housing area. Rates are also determined for each pay grade, both with and without dependents, based on the housing choices of civilians with similar incomes to service members in those pay grades.

The Government Accountability Office has indicated that the Pentagon needs to improve its method for calculating troops' housing allowances. Defense officials are currently reviewing these procedures.