Just released on December 14th, the new 2023 BAH Rate, or Basic Allowance for Housing rates, for military service members will increase by an unusually large average of 12.1%!
What Are BAH Rates?
The BAH rates are calculated based on a uniformed service member’s geographic duty location, pay grade, and dependency status, along with housing costs in each local market. BAH reflects the costs associated with rental housing costs in the specific area. Since rental prices change between 2%-5% from year to year, the housing allowances typically change too!
The Department of Defense looks at the current market’s rent and average utilities – including heat, electricity, water/sewer – to generate the total housing costs for each military housing area. Then they calculate for each pay grade, with or without dependents, by comparing the housing trends of civilians to service members with similar pay grade brackets to produce the BAH rates each year.
How Much Have BAH Rates Increased Since Last Year?
Last year in 2022, BAH increased by 5.1% from 2021. This new increase for 2023 is even greater coming in 12.1% higher than 2022’s rates! To see what your area’s BAH rates are for 2023, click here!
Anything Else I Need To Know About BAH Rates?
Yes! There was another congressionally mandated change that renter’s insurance will no longer be calculated into the BAH. This means you’ll have to pay out of pocket for renters insurance. Privatized base housing companies also no longer provide that protection as part of on-base rental agreements. All the more reason to purchase a home this year!
Lastly, don’t worry if your area is one of the few that has seen a decrease in BAH rates. If you lived there before rates fell, your BAH rate is protected thanks to the individual rate protection policy. The policy prevents the BAH rate from being lowered as long as the service member’s status remains unchanged.
To Wrap it up…
BAH rates have increased dramatically by 12.1% for 2023, giving you more $ to work with to qualify for a home. Yes, we include BAH as income!
Renters’ Insurance is now up to you, adding yet another cost to renting. Funds you could be using for a home of your own! Making 2023 a better time to purchase than last year!
If you happen to live in one of the few locations where rates fell, as long as your status hasn’t changed and you lived there prior to December 14th, 2022, then your rate is protected and will not decrease.