Veterans and active-duty military households often hold an affordability edge for the home they own or rent over other U.S. households. [1] That edge is smaller for active-duty households than for veterans, likely a product of military hotspots often being located in relatively expensive markets.

As of 2021 — the latest data available — veteran and active-duty renter households generally spent a smaller share of their income on rent than all other renters because they tend to have higher incomes. The typical veteran renter had nearly identical rent payments as households without a veteran or active-duty service member, but veterans’ higher earnings meant they spent only 27.4% of their income on rent compared to 30.4% for non-military households.

That affordability edge was smaller for active-duty renter households, who spent 29.3% of their incomes on rent. The smaller advantage is due to the higher rents paid by active-duty renters, which are typically about $370 higher than rents paid by non-military renter households.

Veteran homeowners also spend less of their income on mortgage payments than their non-veteran counterparts, despite having nearly identical incomes. In 2021, the typical veteran household paid 14.6% of its income on a mortgage payment, compared with 15.4% for all other households.

That advantage likely comes from the lower interest rates for Veterans Affairs (VA) loans — privately funded mortgages backed by the U.S. Department of Veterans Affairs. For primary home purchases in 2022, the median interest rate for a VA loan was 4.75%, and the median interest rate for a conventional loan was 4.99%, according to Home Mortgage Disclosure Act data. Other advantages of VA loans include the ability to purchase a home with no down payment and lower fees than conventional mortgage loans.

The affordability picture is different for active-duty homeowners, who typically spent more of their income on a mortgage (18.6%) in 2021 than civilian homeowners — another piece of evidence pointing to military hotspots tending to be in relatively expensive areas. Active-duty households are eligible for the same VA loans that veterans qualify for, but still typically have higher mortgage payments than other homeowners.

[1] Source: A Zillow analysis of the U.S. Census Bureau’s 2021 American Community Survey data. A veteran or active-duty military household is defined as having at least one household member who is a veteran or actively serving in the military. The rent or mortgage burden is defined as the share of the median monthly income for each group that would be spent on the median monthly rent or mortgage paid by each group.