Building a House in Alabama? Here Is What it Might Cost You

Alabama is a beautiful state. Rich in natural resources and history, this southern gem has relatively low labor costs, along with a rich heritage of creating stately traditional homes. In Alabama, like in most states across the nation, housing prices have risen leading to a drop in affordable attractive options for homebuyers. Building your home might mean you’re able to get more of what you want and reap the benefits (like energy saving and up to date amenities) of living in a newly built home.

Some things to know off the bat: the average cost of building your own home in Alabama is $90 to $137 per square foot, but this average cost varies widely by county. There is a large market for semi-custom and tract housing in this state, which can serve to take some of the design work off of your shoulders. Finally, if you’re thinking about laying down roots (not to mention a strong foundation), you might want to think about tornados.

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Home building is a complex, often nerve wracking process known for its abundance of costs, considerations and, erm, “surprises.” We’ve done some of the hard work for you — from talking to professionals to mining through local data, we’ve compiled a cost-by-cost and step-by-step estimate to help you understand just how possible building your dream home in Alabama can be!

Average cost to build a home in Alabama by city

Building a home in Tuscaloosa is the least expensive option on our list, with an average cost of $190 per square foot, while building a home in Huntsville is the most expensive option, at an average cost of $280 per square foot. Here is a look at cities in Alabama and the average cost per square foot to build a home, according to estimates from HowMuchly :

Step-by-step costs to build a home in Alabama in 2022

No matter which state you’re in, the steps involved in building a house will vary depending on whether you’re buying a tract home — which is when a builder has bought a large tract of land to divide into lots and build out several homes — or if you’re building a custom home.

Keep in mind that the price ranges we’re providing are a general estimate. Your agent and, eventually, your builder can give you much more specific information on pricing!

Here is an at-a-glance look at the average costs of each phase of building, but we will break it all down next:

Buying a plot of land ($17,931 per acre)

According to an April 2022 report by the National Association of Realtors, land sales rose 6% in 2021. Land sales for residential use were also up, accounting for 4% of all residential real estate sales in 2021.

In Alabama, the average size for a lot is around 17 acres with the average cost per acre landing at around $17,931.

Foundation ($3,540 – $16,234)

Foundation costs will vary depending on whether you’re pouring a slab or digging a basement, but a typical price range is between $3,540 and $16,234.

Most homes in Alabama do not have basements, which is related to the fact that the state has a shallow frost line. Home foundations need to be placed below the frost line — in colder northern states, the frost line is deep: Maine has a frost line of 74 inches. In Alabama the frost line is only 6 inches below the surface. Because you don’t have to dig very far to place your foundation, it might not make sense to add a basement.

Additionally, flooding is not an uncommon occurrence in many parts of Alabama which makes having a secure, dry basement a more challenging (and costly) architectural feat.

Framing ($2,354 – $10,544)

Framing is when the sticks go up and a structure actually starts to take shape. Expect to pay between $2,354 and $10,544 for this phase of building a house in Alabama. Framing costs tend to vary due to both the size of the home and the complexity of its design — a one-story home with 2,000 square feet of living space will generally be less expensive to frame than a two-story home with the same square footage.

Roof ($5,500 – $12,000)

Roofing doesn’t come cheap — whether you’re putting one on a new house or replacing the roof on an existing home. The costs of a new roof typically range from $5,500 to $12,000.

Material cost is a big determining factor in your roofing costs. In Alabama, installation cost of asphalt shingles averages $194 per 100 square feet, while a wood shake roof will cost an average of $562 per 100 square feet. A tile roof, not very common in Alabama, will cost around $901 per 100 square feet.

Siding ($5,000 – $14,000)

Siding is another big variable: Are we talking vinyl, wood, brick, concrete, stone, stucco, or something else entirely? Siding costs range between $5,000 and $14,000, with vinyl or engineered wood siding typically costing between $3 and $12 per square foot.

Stucco, fiber cement, and wood are recommended as among the most popular sidings for southern homes. This is because they tend to be resistant to the kinds of weather that the south gets — storms and humidity. The average cost to stucco a home in Alabama averages $8,123 in 2022. Wood siding, which you see a lot of in the Alabama market, comes in at a much lower average of $771.

Alabama is in the top three states in the nation with the most tornadoes annually. In 2021, Alamaba had 100 tornados touch down across the state, a significant increase from the 78 tornados recorded in 2020. Houses clad in brick tend to have a better rate of withstanding tornados. Brick siding is, however, on the higher end price-wise and can range between $5 and $15 per square foot.

Appliances ($10,875)

You guessed it — appliance pricing also varies widely. Depending on brand, functionality, finish, and so on, you’ll spend an average of $10,875 if the home does not come with any, but you can definitely drop up to $24,400 or more on high-end appliances. While unfortunately the cost of appliances doesn’t vary too greatly state to state, there are better times of the year, like Labor Day, to make those purchases.

HVAC system ($5,000 – $10,000)

The installation of a new heating and cooling system averages between $5,000-$10,000 in a city like Birmingham, and has a lifespan of 10-15 years.

Plumbing system ($2,000 – $5,000)

Plumbing can cost anywhere from $2,000 to $5,000 on average — not including fixtures like sinks and toilets. If you plan to build a home that doesn’t link into a municipal sewer system, the cost of installing an independent septic system in your home will cost around $6,865 for a 3-bedroom house.

Electrical system ($500 – $2,300)

The cost to wire a house is, on average, between $500 and $2,300.

Building permits (variable)

Permits vary by state, city, and county, but they typically range from a few hundred dollars to a few thousand. In the city of Auburn, it will cost $600 for the first $100,000 of a project and an added $4 for every additional $1,000. For homes that cost $1,000,000 and above, building permits will cost $4,200 for the first $1,000,000 with an added $3.00 for every additional $1,000 in cost of the project.

Finishes and fixtures (variable)

Finishes and fixtures comprise everything from countertops to sinks, and lighting to flooring. Needless to say, pricing varies widely and depends heavily on your preferences.

Average carpet installation costs can start at several hundred dollars and go up to $3,000, while hardwood flooring installation starts around $2,500 on up to $7,000.

Laminate countertops tend to range from $790 to $1,626, while granite averages from $2,250 to $4,500.

Building a custom home vs. a home in a development

As a general rule, building a custom home that is tailored to your every need will be more expensive than buying a tract home from a builder. On average, building a custom home in Alabama will cost $90 to $137 per square foot, while building a tract home in Alabama will cost $70 to $90 per square foot.

A tract build will already have the design, zoning, and team in place. Buyers can expect flexibility with some finishes within the home itself, but a lot of the design is already conceptualized and ready to go. There may even be a model home in the area where you can walk around and get a feel for what your finished house will look like.

For custom builds, nothing is decided — and while this gives you more flexibility, this also requires you to make choices on everything from layout to light switches.

We spoke to Ashley Miller, a top agent in Auburn, Alabama with more than 19 years of experience. Miller emphasized that the choice of whether to go custom, tract house, or something in between is really down to what the buyer is looking for.

“The custom build will always cost more and take longer as you make adjustments and decisions along the way,” he shares. “With the [tract house] product, you’ll make most of your decisions upfront and as the process takes place, you’re a little more hands off. You have to consider if you have the ability timewise and financially for a custom build.”

Deciding on a home building route where some or all of the major decisions (and headaches) are simplified down to a list of options is a popular type of home building Miller sees in Alberta county.

“I would say the most common build is where the developer has the plans that will fit on the lot. You go in there and get to have some say in the finishes and in the initial look… I would call this a semi-custom build.”

Building a custom home will also require you to assemble a team of experts to design and build the home from start to finish. Here are the team members you will need and a breakdown of what they might cost you:

Hiring an architect (5% – 20% of the total build cost)

Hiring an architect will be integral to making your vision come to life when building your custom dream home. Before you start your search for the right architect, get clear about what you are looking for. Be sure to do your research and ask your network for recommendations for architects in your area with experience designing the kind of home you are looking to build.

The cost of hiring an architect could make up anywhere between 5% and 20% of the final cost of the build. For a 2,000 square foot home in Alabama with a final build cost of $240,000, that would amount to $12,000 – $48,000. Some architects will opt to charge by the hour or per square foot of the build for their services, but this is less common.

General contractor (10% – 20% of the total build cost)

A general contractor will oversee the entire process of building your custom home — they will also be responsible for hiring and paying subcontractors, vendors, and construction workers. General contractors typically charge what is called a “cost-plus” fee arrangement which accounts for the cost of the labor and materials plus a negotiated fee for the general contractor. This usually comes out to 10% to 20% of the final cost of the build.

With the tract or “turn-key” option, Miller reminds potential home builders that the cost of general contractors (as well as architect, surveyor, builder, etc.) will already be bundled into the cost you pay upfront. For custom build projects, where “cost-plus” is part of the equation, your budget will need to have wiggle room in it as you work with your general contractor to put together a strong team for your build.

Additional costs of building a custom home in Alabama

As we mentioned, building a custom home usually comes with additional costs. Again, your agent can help you determine more accurate costs — these are average figures provided to give you an idea.

Land survey ($600 – $900)

Land surveys, which identify your property lines and land features, range between $600 and $900.

Excavation and grading ($2,581)

If you’re buying a tract home, the land price will be rolled into the overall price to build a home. If you’re buying a lot on your own and then building a custom home, you can expect to pay around $2,581 to clear the land and prepare it for construction.

Common styles of homes in Alabama and their average costs

Living in Alabama comes with a lot of good old southern charm, and the popular housing styles in the state match that aesthetic. “We’re very traditional here in Alabama,” says Miller. He told us the three most popular housing styles he sees are barn style, cottage style, and traditional with people mixing and matching between these styles to build what suits them best.

More affordable options for building a home in Alabama

While going with a bare-bones building strategy can get you into a new construction home for less, cheaper isn’t always better. Shoddy build quality will inevitably lead to problems down the road — anything from a leaky roof to poor sound insulation can be a frustrating discovery when you’ve only been in your new home for a few months — and there’s value in creating a home you genuinely want, not just one you’re settling for.

Alternative home building options can give you more for your money and offer valuable flexibility during the construction process.

Tiny homes ($30,000 – $60,000)

A tiny house is usually 600 square feet or less in size. They’re not ideal for large families, but building a tiny house can be faster and more affordable than a conventional home if a smaller space fits with your lifestyle. On average, tiny homes cost between $30,000 and $60,000 to build.

The cost of land is relatively low in Alabama compared to the national average. This means that space-saving home solutions like a tiny house are not as popular as they are in more dense, pricey states. Larger houses that include home workspaces and comfortable access to the outdoors, are more of what Miller sees home builders designing.

“The square footage may not be as important [to people] as home offices and yard space. People want to have a place to enjoy their home,” he shares.

Modular and prefabricated homes ($45 per square foot)

Purchasing a modular or prefabricated home can be a cost effective and time saving alternative to these semi-custom approaches. The average cost of a new mobile home in Alabama is $45 per square foot averaging out to $100,000 for a home which includes the cost of basic site improvement and land. In 2021, Alabama manufactured homes accounted for 28.8% of all new single-family homes, putting Alabama 7th on a list of states with the highest rate of manufactured house buying.

Is it cheaper to buy or build a home in Alabama?

As a general rule, buying an older home will be cheaper than building a home. In Alabama buying a home will cost around $85 per square foot, while building one will cost $90-$137 per square foot.

While building a home will almost always come with a higher price tag upfront, there are some long-term savings that new construction homeowners enjoy:

• Energy efficiency: Newly constructed homes are generally more energy efficient than older homes — homes built after 2000 use 21% less energy than older homes on average, according to the U.S. Energy Information Administration. This is partially due to more strict energy regulations as well as better insulation and windows in new homes.
• New home warranties: New construction homes are often covered under builder warranties for a specified period of time. When purchasing an older home, most of the key systems, such as the HVAC, roof, and plumbing, will be older and no longer covered under any kind of warranty.
• Fewer maintenance costs in the first few years: With a newer home, you can count on your HVAC, plumbing, electrical system, and more to be functioning properly with little required maintenance in your first few years of homeownership. Older homes will likely have older roofs and older systems, requiring you to pay for replacement much sooner.
• New homes might be cheaper to insure: Many homeowners insurance providers offer discounts for new construction homes, due to the lessened risk of damages common in aging homes.
• The privacy you want: With a new build, you get to choose not only the site and orientation of your home, but also how the interior space functions around your needs. You have more control over how your home interacts with its surroundings, including landscaping, window size and quality, and fencing between your home and the rest of the world.
• A point of pride: It’s true that building a home can come with a steep overhead cost of energy, time, and personal stress. One huge benefit of completing the project is the sense of pride and personal accomplishment that comes with living in a house you built, not to mention the bragging rights!

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Get started on building your dream home

Getting to the end of this article you might be thinking wow there’s a lot to consider when building my dream home! And you’re right, from the very first step along this journey there are decisions to be made that will continue to affect you down the line. The absolute best first step you can take on this journey is finding an excellent agent who will be there with you every step of the way.

Miller broke down for us three important ways a qualified agent will make your home building process not only easeful but possibly enjoyable: “The value of working with an agent is number one, knowing the options in the area, number two is knowing the process, and number three is financially talking you through the steps”

Bottom line: get yourself a great guide and get started on building the Alabama home best suited for you!

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