If you’re debating building or buying a home, considering the cost of construction should be an important part of your calculation.
While this answer is complicated and depends a lot on location, building type, and building class, you can often get a rough idea of how much you’ll spend upfront.
In fact, the average residential construction cost on a national level is $150 per square foot.
How much does it cost to build a house in Alabama?
For a 2,400 square foot dwelling, you’ll pay the national average but as little as $100. But, you’ll have to add the cost of the plot, permits, and any design costs. Plus, cost per square foot can go up to over $400. So, if you build a 2,000 square foot family home in Alabama, you can expect it to range between $200,000 and $500,000, or an average of $260,000.
*Disclaimer: The research in this article was correct as of October 2022. Our sources are linked throughout the article.
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Cost To Build House In Alabama By Size
Most construction costs are based on square foot calculations. For this reason, the national average is $150 per square foot. However, costs will go up and down based on building size.
In most cases, the larger your building, the less you pay per square foot. That’s because most construction companies need to make a certain amount per building site – which means they have to charge more for smaller builds.
And, of course, if you choose for a luxury build, you can spend almost as much per square foot as you want.
| Size (Sq. Ft.) | Min. Cost | Max. Cost | Average Cost |
|---|---|---|---|
| 700 | $70,000 | $490,000 | $140,000 |
| 1200 | $96,000 | $540,000 | $216,000 |
| 2000 | $150,000 | $840,000 | $320,000 |
| 2,800 | $210,000 | $1,120,000 | $420,000 |
| 3,400 | $238,000 | $1,292,000 | $476,000 |
In each case, the minimum cost is unlikely to be applicable in an urban area. This low building cost includes building to meet local city and state building code standards and nothing more.
In addition, it does not include any extra expenses incurred for inspections, revisions, etc.
Cost To Build House In Alabama By Type
All housing is built to a minimum standard, following the Alabama State Building Code.
This means that all housing is built to the standard of quality required for safe and comfortable living, meeting local energy efficiency and resilience standards.
However, you can always choose to build with more luxury materials or for more luxury features.
While it costs an average of $150 per square meter across the state for a building that meets state codes, you can pay significantly more for a luxury build.
The following chart covers cost estimates for a standard 4-person family home, of 2,000 square feet. In addition, prices are set at the national average.
If you were to build the same in Birmingham or Montgomery, you’d likely have to increase the rates by about 10%.
| House Type | Min. Cost | Max. Cost | Average Cost |
|---|---|---|---|
| Standard | $180,000 | $394,000 | $304,000 |
| Premium | $418,000 | $642,000 | $494,000 |
| Luxury | $688,000 | $1,056,000 | $814,000 |
In addition, if you build in a rural area, you may be able to get the minimum cost for a standard home down to less than $160,000. However, less than that is extremely unlikely.
Building A House In Alabama Cost Factors
There are dozens of factors that contribute to the cost of building a home in Alabama.
Some of the most important include location, cost of materials, cost of labor, and cost of land.
Location
Land across the state of Alabama ranges in cost from about $1 per square foot to well over $22 per square foot. The cost of land is extremely difficult to predict, simply because it can vary by neighborhood and nearby amenities in many areas.
For example, in Birmingham, you can purchase 0.14 acres of land for as little as $8,000. That same plot could cost you as much as $169,000 in the same city but in a different neighborhood.
Therefore, location impacts the cost of land a lot.
However, location also impacts the cost of building. This can be more difficult to predict. But the more densely populated your area, the more likely it is that building costs will rise.
For example, population density increases the logistical challenges of bringing in materials, increases safety concerns, and creates concerns around storage, etc.
For that reason, building costs in big cities (Huntsville, Mobile, Montgomery, Birmingham, Dothan) will be 10-25% higher than in smaller ones.
Design
Most interior design decisions, including cabinetry, trim, door shapes, etc., are made before the home is built. You will have to make interior design decisions, and that can be quite costly to have done professionally.
Design fees can range from a small fee to a large percentage of house construction. On average, if you hire an interior designer, you can expect to pay $6,000-$12,000.
In most cases, you’ll pay either $50-$200 per hour in the state of Alabama, or $2-$15 per square foot. This means that for a 2,000-square-foot home, you could pay up to $30,000 for interior design.
Engineering and Architecture
Engineering and architecture fees are necessary, even if you’re buying a blueprint design for your home.
Here, you’ll have to have the building and materials inspected to ensure everything is up to code – especially if you’re building within city limits.
An architect can also draft a new home for you from scratch, ensuring that your home plan perfectly utilizes your space and meets your needs. However, this can be quite expensive.
In fact, most architects charge a percentage of the cost of the final project. This means you may pay 5-20% of the total fee to your architect.
Others will charge a flat rate, but this may not include inspection and working with the builders to ensure the home meets building code standards.
House Plan
Chances are that you have to pay someone to design your home before you have it built.
Of course, you can always purchase a blueprint for your home pre-drafted. However, if you want to have one drafted by your architect, it’s likely included in the fees listed above.
The more complex your home, the more a plan will cost. For example, if you have multiple stories. Or, if you have a complex roof.
Decks, balconies, and porches can also add to the cost. That’s also true if you want to work a pool, basement, or odd shape into the design.
Labor
The cost of labor can vary significantly depending on location, time of year, and how busy local builders are. In most cases, you’ll pay a flat fee to a single agency, which will find you builders.
Licensed contractors will normally start rates at around $15 per hour but these go up to over $50 per hour. In addition, your construction site manager will probably charge $38-$50.
However, most construction companies will work the full rate into a single flat-rate fee based on estimates. In this case, if the job ends up going over budget, you may have to pay more than the initial quote.
Construction Line of Credit
In every case, your construction agency will want a line of credit or capital they can pull on to pay employees and purchase building materials.
Here, you can use your own capital or get a line of credit from your bank. In each case, there will be fees associated.
However, this shouldn’t increase the total amount of your build project, it should be a part of the total rate.
Permits/Fees
Every city in Alabama has its own building fees. However, on average, you can expect to pay a fee based on the square footage of the house. For example, the City of Huntsville charges:
((Heated area square footage X $15) + (unheated area square footage x $7.50)) x .0055
So, for a 2,000 square foot residence with an attached garage and porch of 300 square feet total, you’d have
((2000 X $15) + (300 x $7.50)) divided by .0055 = $177.37
Of course, every city has its own system. Some cities in Alabama charge a flat rate of $0.15 per square foot. Mobile Alabama has a minimum fee of $200 and charges $0.42 per square foot.
Essentially, you have to check with your local city hall to see what your building permit will cost.
Inspections
If you’re building a home within city limits, you likely have to pay for inspections to check for sewage, existing electric lines, and other obstructions that could impede the building site.
At the end of construction, you’ll also need an engineering inspection to ensure that the home meets state code standards.
Cost of Materials
The cost of materials will significantly impact your build costs. However, those will depend on your specific location and the materials you choose.
For example, if you’re paying for a concrete slab foundation, you can normally expect to pay $4,500-$15,000 for it. On the other hand, if you want to add a basement underneath, rates can go up to $80,000.
That’s without considering the costs of different building materials. For example, roofing costs vary significantly depending on what material you’re using.
If you’re using wood framing, you can expect rates to go from $12,000-$33,000. On the other hand, metal frames normally start at around $20,000.
Siding also varies a great deal. With options ranging from slate to vinyl, you can set a price point and buy within that.
House Building Cost In 6 Cities Of Alabama
Building costs can vary quite a bit by location.
Normally, this depends on housing pressure, the rate of population growth, and how busy builders are. If you’re in a smaller town, you’ll likely have an easier time finding cheap construction.
The following average rates are based on the cost of building a 2,000-square-foot family home.
| City | Average Cost Per Square Foot |
|---|---|
| Huntsville | $150 |
| Montgomery | $149 |
| Birmingham | $155 |
| Mobile | $149 |
| Evergreen | $137 |
| Auburn | $146 |
Essentially, “average” costs only change slightly across the state. However, these differences can add up considerably in the final rate.
Frequently Asked Questions
If you still have questions about building a house in Alabama, this FAQ should help.
Is It Cheaper To Build or Buy a House in Alabama?
According to Zillow’s Home Value Index, the average cost of buying a home in Alabama is $215,294.
This means that, on average, it will be about the same to slightly cheaper to buy your house rather than building it. That’s especially true as this rate includes the cost of the lot.
However, a purchased home may still need significant work to be livable.
In addition, home inspections (normally several thousand dollars), closing fees (2.56%-3.15% of the total value of the sale), agent commission (usually 1-3%), etc., can all be considerable.
In fact, for a home purchased at $211,090, you can expect to pay $6,500+ in closing fees.
Do You Have To Be Rich To Build a House?
No. However, you will likely need a line of credit from your bank. This may require a guarantee or a co-signer if you don’t have assets.
In addition, it’s a lot easier to get a line of credit from your bank if you already have a significant portion of the capital required. You’ll also be able to get a line of credit based on the value of the plot you’re building on.
However, it’s always important to talk to your bank to see what’s possible based on your credit, your prospective mortgage, and your assets. If you don’t qualify for a loan, you may not be able to hire a construction company.
Is it Wise To Build a House in 2022?
That depends on what you want, where you want to build, and what you want to build.
For example, if you already own a plot, it may be cheaper to build a house on that than to buy a house and plot.
In addition, if you want something specific and have the budget, spending the money to get exactly what you want from your home could pay off.
On the other hand, if you’re on a budget and want the best deal rather than the best home for your money, buying is likely going to be cheaper than building.
Final Thoughts
Building a house from the ground up can be costly. In most cases, you’ll pay somewhere between $100 and $200 per square foot, or an average of $150 across the state of Alabama. That works out to $260,000-$300,000+ for a four-person family home. And, the more you customize that or add complexity, the more it will cost.
Of course, those rates can vary significantly based on market changes and dips, so you should always check local rates, local cost of materials, and local fees before moving forward with your build.