DoD Approves 4.2% BAH Increase for 2026 

The Department of Defense announced a 4.2% average increase for the Basic Allowance for Housing (BAH) rates for 2026. The new rates for this military benefit are effective January 1, 2026, and an estimated $29.9 billion in housing allowances will be paid to approximately one million service members.

2026 BAH Increase Approved by the DoD

How does the 4.2% average increase for 2026 compare to previous years? In 2023, the average BAH rate increased by 12.1%. This was one of the largest jumps, responding to high housing market costs in the prior year.

In 2024 and 2025, the average increase was 5.4 percent. Many note that the 2026 increase of 4.2% is lower than the 5.4% increases of 2024 and 2025.

The Defense Department updates the BAH rates annually. The allowance depends on three main factors:

• the service member’s duty location
• pay grade
• dependency status

The calculation process covers military housing areas in the United States, including Alaska and Hawaii. The department collects rental housing cost data from the U.S. Census Bureau, the Bureau of Labor Statistics’ Consumer Price Index, commercial rental databases, and input from local military housing offices.

Analysts determine median market rents and average utility costs, then link these costs to different pay grades based on the housing choices of comparable civilians in that market.

The 2026 rates cover about 95% of the determined local housing costs. This military benefit is not intended to cover 100% of the housing expense. The remaining 5% constitutes a member cost share, which varies by grade and dependency status and ranges from $93 to $212 per month.

This allowance includes something called individual rate protection. It’s designed so that a service member who maintains uninterrupted BAH eligibility at a location will not see their allowance decrease, even if local housing costs drop.

They receive the higher of either their current rate or the new, updated rate for their location. A service member’s rate can decrease if they move to a new duty station, have a reduction in pay grade, or change their dependent status.

While the national average increase is 4.2%, the actual change for an individual depends on their specific military housing area. Service members can find their 2026 rate using our BAH calculator.