Military households will see an average 4.2% increase in Basic Allowance for Housing (BAH) starting January 1, 2026, according to the Department of Defense. This annual adjustment affects nearly one million service members nationwide and plays a significant role in housing affordability, whether living on base, renting off base, or purchasing a home.
According to the Pentagon, total BAH spending is projected to reach $29.9 billion in 2026, up from $29.2 billion in 2025. While this year’s increase is slightly lower than the 5.4% adjustments seen in both 2024 and 2025, it continues the trend of aligning housing allowances with real-world market conditions.
How BAH Is Calculated
BAH rates are determined using a combination of:
-
Local rental market data
-
Utility costs
-
Housing types and sizes by rank
-
Civilian housing choices for comparable income levels
The Department of Defense evaluates data from commercial housing databases, public rental listings, government sources, and on-the-ground installation housing officials. Rates are set for 299 military housing areas across the U.S., Alaska, and Hawaii.
What the 4.2% Increase Really Means
The 4.2% figure represents a national average. Individual BAH adjustments vary by location and rank. In some areas, rates may increase more than average, while others could see slight decreases. Importantly, service members already stationed in an area where rates decline will retain their current BAH rate, offering stability for existing households.
The BAH program continues to aim to cover approximately 95% of housing costs, with service members contributing the remaining 5%. In 2026, that out-of-pocket portion is estimated to range from $93 to $212 per month, depending on rank and dependency status.
BAH Increase Plus Potential Pay Raise
The BAH update coincides with a proposed 3.8% basic pay raise, which has passed the House of Representatives and awaits Senate approval and the President’s signature. If enacted, this combination could meaningfully improve monthly cash flow for military households in 2026.
Why This Matters for Military Housing Decisions
Changes in BAH directly affect decisions around:
-
Renting versus buying
-
Neighborhood selection
-
Commute considerations
-
Long-term equity planning
Understanding how your updated BAH aligns with local housing markets is critical, especially in areas with rising home prices or limited rental inventory.
For a full breakdown and to look up your specific rate, read the original Military.com article here:
Original article: Military BAH Housing Payments Are Up 4.2% for 2026
https://www.military.com/daily-news/2025/12/11/military-bah-housing-payments-are-4-2-2026.html
If you would like help interpreting how your 2026 BAH rate fits into current housing options, reach out for more information.
