Troops can expect to see basic allowance for housing increases in the range of $93 to $212 per month in 2026, depending on factors including their pay grade, family size and location, according to a Pentagon news release. The Defense Department estimates it will pay about $29.2 billion in BAH to about 1 million service members in 2026. (Erin Tansey/U.S. Marine Corps)
The Pentagon will boost housing allowance rates for service members by an average of 4.2% on Jan. 1, the Defense Department announced Thursday.
Troops can expect to see basic allowance for housing increases in the range of $93 to $212 per month in 2026, depending on factors including their pay grade, family size and location, according to a Pentagon news release. The Defense Department estimates it will pay about $29.2 billion in BAH to about 1 million service members in 2026.
“The Department collects rental housing cost data annually for 299 military housing areas in the United States, including Alaska and Hawaii. The basic allowance for housing rate-setting process relies on a wide variety of data sources to obtain high-quality, accurate, current-year housing cost data,” according to the Pentagon announcement. “… While average basic allowance for housing rates increased, various rental markets may experience different market trends, and the 2026 rates reflect those geographic market condition differences.”
The Pentagon pays BAH based on six housing profiles for its service members that range from a one-bedroom apartment profile for an E-4 — a specialist or corporal in the Army — up to a four-bedroom, single-family home for an O-5 — a lieutenant colonel in the Army — or higher rank with dependents. It sets BAH rates annually based on a complex methodology meant to estimate the local median rental places in locations near military installations.
The funds are meant to cover about 95% of average housing expenses — including utilities such as electricity and water — for the housing profile in each location, according to the Defense Department.
Actual out-of-pocket expenses might be higher or lower than the prescribed rate based on a service member’s housing choice. Urban regions usually offer higher BAH rates than rural areas due to the generally higher cost of housing. Rental prices typically change between 2% and 5% from year to year, according to the Defense Department. Troops saw an about 5% average boost in BAH rates in 2025.
Service members who remain at their current location are also protected from having their payments decreased if BAH rates in their area are reduced in 2026, the Pentagon said.
“No matter what happens to housing costs — including the out-of-pocket expense adjustment — an individual service member who maintains uninterrupted basic allowance for housing eligibility at a given location will not see a rate decrease,” according to the news release. “This ensures that service members who have made long-term commitments in the form of a lease or contract are not penalized if the area’s housing costs decrease.”
A watchdog report ordered by the Defense Department this year suggested that the Pentagon should rework its BAH rate calculations to protect troops from rapid housing market changes, such as were seen during the 2020 and 2021 coronavirus pandemic, and to better reflect the housing choices service members have been making. Troops in recent years have typically chosen to rent or purchase larger housing units than their BAH profiles suggested they live in, the RAND Corp. study found.
That study found the Pentagon’s BAH algorithm, unchanged since 1998, could not account for sudden, large spikes in rental prices. Some locations around military bases in 2020 and 2021 saw increases of more than 10% in rental prices in just a few months, RAND analysts found.
It was not clear Thursday if the department had taken RAND’s suggestions since the report’s release in January. Pentagon officials did not immediately respond to an inquiry about the study’s findings.
The latest BAH rates “are part of a robust military compensation package,” according to the DOD release.
Service members can calculate their housing allowance by using the Basic Allowance for Housing calculator at: https://www.travel.dod.mil/Allowances/Basic-Allowance-for-Housing/BAH-Rate-Lookup/
