2025 BAH RATES HAVE BEEN ANNOUNCED: WHAT YOU NEED TO KNOW

Basic Housing Allowance (BAH) should be increased at the beginning of the new year. As of this writing, the BAH rates in 2025 are just a proposal, but if approved, service members will enjoy an increase to help cover their living expenses. Keep in mind that everyone’s individual BAH rates will vary depending on various factors but especially the cost of living where you’re stationed. Here’s a closer look at what 2025 will bring.

Are BAH Rates Going Up in 2025?

An average increase of 4.5% in BAH rates in 2025 is being proposed by the U.S. Department of Defense (DoD) as part of the annual defense budget.

Lawmakers will need to approve these provisions to make the 2025 BAH rate increase go through and take effect for all branches beginning on January 1.

While the actual 2025 BAH rate may vary, the DoD is working to continue to make increases happen as service members are facing various economic pressures.

"The budget funds must-pay items related to quality of life and quality of service, such as a 4.5% pay raise for our service members that builds on raises for the past three years in a row, including last year's 5.2% pay raise," said Deputy Defense Secretary Kathleen Hicks.

Things to Consider

The 2025 military BAH rates will cover 95% of the living expenses for families but everyone’s actual benefits look different.

This is because the military considers many different factors, including your grade, how many dependents you have, and the cost of living where you’re stationed.

Service members who live OCONUS (outside of the continental United States) typically receive more because it costs more to live overseas—these benefits are known as an Overseas Housing Allowance (OHA).

If you’re looking to prepare, you can get an estimate of what to expect by looking at your local cost of living index.

BAH is determined by looking at the median rent in your area as well as the average cost of covering utilities for civilians within a local market.

Historical BAH Rate Increases Leading to 2025

Leading up to the proposed 4.5% increase in 2025, BAH rates have been elevated in recent years:

• 2024: 5.4%

• 2023: 12.1%

• 2022: 5.1%

The main culprit for these increases was ongoing inflation and housing market conditions that were unfavorable for many service members.

Even the 4.5% rate would be an elevated departure from previous years with more favorable economic conditions, including increases of 2.9% in 2021, 2.8% in 2020, and 2.6% in 2019.

Hopefully, the 2025 BAH rates will increase to help military families as economic conditions may be tapering off but are still affecting Americans across the country and the world.

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