BAH Levels and Increases

The Secretary of Defense announced a major FY2001 Budget initiative to eliminate out-of-pocket costs for off-base housing in the United States. This action reduced service members' out-of-pocket costs for housing from an average of 18.8 percent of monthly housing costs in 2000 to 15 percent in 2001, with continued reductions each year thereafter. Average out-of-pocket costs were entirely eliminated in 2005.

Average rental costs in particular locations fluctuate, both up and down. BAH rates for an area may follow both the increases and decreases of average rental costs, but no individual's rate will decrease, so long as the member retains uninterrupted eligibility for BAH at the same location.