By Colleen Flaherty
Killeen Daily Herald

Military personnel will start the new year with a raise in their housing allowance.

Starting Jan. 1, Fort Hood soldiers will see a near 7 percent jump in their Basic Housing Allowance, separate from their regular paycheck. That’s 5 percentage points higher than the nationwide average announced last week by the Defense Department.

Nationally, allowance rates are adjusted each year based on housing costs in a given area, as determined by the Defense Department. Rates vary widely by location, the rank of service members and whether or not they have dependents.

Killeen resident Natalie Abts, 23, recently moved to Killeen from her native South Dakota with her husband, an Army private first class, and said she’s happy about the increase.

“We realized the cost of living is high here,” she said. “We are just barely making it from paycheck to paycheck. I’m so glad the (allowance) is going up. Every little bit helps.”

Fort Hood residents won’t benefit from the increase since on-post housing fees are always equivalent to the current allowance rate. Service personnel living off-post are free to use their allowance however they wish.

In Killeen, a private with dependents will get $1,023 monthly, up $78 from $945 last year.

A single private will get $801, up from $753. Each enlisted rank will see a similar increase in pay, up to sergeants major with dependents, whose monthly allowance will go from $1,416 to $1,539.

Officers’ adjustments are similar in scale. The housing allowance for a second lieutenant with dependents will increase from $1,026 to $1,074. Brigadier generals and higher with dependents will rise from $1,704 to $1,878 a month.

In 2011, national allowance rates fell slightly from the year before, including in the Fort Hood area. They’ll continue to fall in 2012, with the national average set at 2 percent, for depressed housing communities, including Southern California.

Jose Segarra, owner of Exit Homevets Realty in Killeen and spokesman for the Fort Hood Area Association of Realtors, said the higher allowance rates could mean good things for the local housing market. The extra 7 percent might be the push people need to leave post housing and invest in real estate in the surrounding community.

“I think it’s a good opportunity for soldiers, as far as when a lot of them use (the allowance) to purchase homes,” he said. “Some of them might say, ‘We might as well just buy a house and then get something out of it.'”

Home rates steady

The current market is a particularly opportune time to buy in Killeen, said Segarra, because interest rates are historically low and home prices have stayed steady year-to-year.

The median home price in the Killeen-Fort Hood multiple listing service was about $120,000 in 2010 and through Dec. 1 of this year.

But Segarra cautioned that buying a home is best for people who can live in the residence for at least two years before they have to sell to ensure a profit.

Service personnel also will receive a 1.6 percent raise in salary starting Jan. 1.