(COLORADO SPRINGS) — The basic allowance for housing rates will increase in 2025 to meet the needs of active military, according to the Department of Defense (DOD). According to the DOD, the new rates will go into effect on Jan. 1. The change reflects a continuation of recent rental housing market trends across the 299 military housing areas used to calculate Basic Allowance for Housing (BAH) rates. The DOD will pay around $29.2 billion in BAH to about one million service members in 2025. The allowance is paid to active-duty service members stationed in the U.S. when government housing is not available. The allowance is aligned with the housing costs of civilians with comparable incomes, according to the DOD. "This is pretty much in line with the same increase we saw between last year's rates and the previous year, which was around a little over 5% as well," said Summer Britford, the allowance division chief in the Office of the Undersecretary for Personnel and Readiness Military Compensation Policy Directorate. "The housing market continues to trend upward consistently this year as it did last year." According to the DOD, the allowance is a significant component of service members' overall pay and has a significant impact on the well-being of military families. "Our goal is to make sure that the overall compensation package remains strong and that it remains competitive," Britford said. "And with BAH being such a huge component of that we are focused on making sure we get it right."  A variety of sources are used to set rates each year, including data from the Bureau of Labor Statistics and the Census Bureau as well as leading property listing services. The DOD excludes unsuitable housing such as rentals in high crime areas or excessively large or small units in order to ensure the allowance compensates members for proper housing in their communities. A calculator for BAH rates can be found on DOD's website linked above.