If you've been house searching in Alabama, you've probably quickly realized that an existing home is not going to meet everything on your need or want list.

Either the bathrooms look like they're stuck in the 80's, or the layout is just weird.

This has probably lead you to consider building your own home suited to fit you and your family's specific needs.

But the question is, what are the average costs of building a house in Alabama? Lets discuss some of the associated construction costs in this blog.

Custom Home vs Production Home

What is classified as a custom home? This may seem like a pretty straightforward question for some but we're going to discuss the differences between custom homes and production homes for those who are unaware.

A custom home is a one of a kind home, designed and built for one person. Usually home builders work with architects and home designers to create a house plan for their client. The client has the power to control the layout, size, and home design.

The client also owns the land that the house will be built on.

A production home is built on land that the builder owns. I'm sure you've come across new subdivisions that have huge signs advertising available lots to build on. You might have heard of Stone Martin Builders or D.R. Horton, two of the largest home builders in Alabama.

Production home builders tend to use stock plans that offer a variety of plan options, upgrades, and plan layout choices. There's usually options for different price points and budgets.

This is the most affordable home building option, available to the most people, although there is less freedom and flexibility with choices.

How Much Does it Usually Cost for a New Custom Home in Alabama per sq ft?

Construction cost for a new house in Alabama has an average cost to build of $134 per square foot according to Forbes. For a home that is 2,000 square foot, this brings the price to $267,620. These figures do not include land costs.

Production homes are lower per square foot, with construction cost coming in at around $70 to $90 per square foot.

Average cost to build a home in Alabama by city

The cost to build per square foot varies greatly depending on the city in Alabama that you intend to build in. Howmuchly included a great list summarizing the costs per square foot for each major city in Alabama.

Tuscaloosa and Montgomery were among the lowest places to build per square foot and Huntsville was the highest city on the list.

Home Building Process Associated Costs

There are many home building costs to budget for when planning to build your dream home. From hard costs, like foundation costs, material costs, and roofing costs, to soft costs like building permits.

Plot of Land Costs

Choosing the land for your new construction home will be one of the first costs that you will come across. Land value is not included in the prices mentioned above.

The costs of land vary of course by city. However Alabama is ranked 23rd for the most expensive states for land at $12,356 per acre.

So, even though the cost to build in Alabama is lower than the national average, the land costs are on the more expensive side.

Choosing a Home Builder

General contractors are the orchestrators of the construction process who help bring the vision of your dream home to life. That of course comes with a minimum fee of 10%-20% on the total build price.

A general contractor is responsible for home building timelines, dealing with subcontractors ensuring that all work is done up to code and to the standards of the client.

If you're looking for a licensed custom home builder in Alabama, you can get in touch with us here at Alabama Construction Pros. You can also ask your local home builders association for referrals.

Once you find a homebuilder, be sure to check the state's licensure board to make sure that they have their actual home builder's license.

Soft Costs to Build a House in Alabama

Soft costs for home building are costs involved with getting the project started. These include costs such as obtaining building permits, design costs from an architect or designer, and taxes.

How Much are the Hard Costs?

Hard costs are any costs directly related to material or labor costs. A non-exhaustive list would be:

Getting the Ground Ready to Build

Or excavation costs can range from $1,400 to $3,300 to prepare the ground to build a house on. Soil tests can add another $2,000 on top of that. Soil tests are important because it help to identify whether or not your ground is the proper soil to build on.

This is more important than you might think because building on improper soil can cause major foundation issues. I've even heard a story about a house sliding down a hill because it was built on the wrong soil.

So, even though soil testing may add to the overall home building costs, it's definitely worth the peace of mind in knowing that your house won't slide down a hill.

Foundation

The foundation of your home is one the most important aspects of the custom home building process. Without a good one, your new house won't last very long. The average cost to build a normal slab foundation is around $4,500 and $13,500.

Basement foundations come at a higher costs per square foot at $18,000+.

Framing

Framing is like the skeletal system of your house. It includes floors, walls and roof trusses. It's often one of the most expensive things to do when you build a house in Alabama because of the high lumber costs. Right now, the total cost for framing is around $33,000.

Roofing costs

A new shingle roof costs $5,500 and $11,500.

Plumbing

Setting up plumbing for a new house in Alabama could cost around $9,000.

Electrical

To set up electrical for a new house averages around $8,000 or $4 per square foot. This depends on the specific lighting plans you have for the home.

How to Pay for a Custom Home

There are many more costs associated with building a house in Alabama that are not mentioned in this blog. From the HVAC system, to additional material costs and installation cost.

With all of these costs adding up, how does one go about the personal finance aspect of paying to build a home in Alabama?

Home Construction Loan

The primary way to cover the home building costs in Alabama is to take out a construction loan. Construction loans are usually borrowed from a bank and not a mortgage company.

These types of loans are short in duration, only extended out about 12-18 months, depending on how big the new construction project is. They typically require a down payment of anywhere from 20% to 30% of the total loan costs.

Once the build is complete, your loan will automatically convert to a regular mortgage when the project is complete, if you have a construction-to-permanent loan (C2P).

If you have a standalone construction loan, which is a short-term loan to fund a building project, you have to pay it off when it's completed and it won't convert to a mortgage.

We hope you found this blog helpful. If you decide to renovate instead of building, check out our blog posts on the cost of a Kitchen Remodel, the cost of a Bathroom Remodel, and Adding a Room Addition. Of course get in touch with us if you are interested in us handling your custom build.

FAQ's

Is it cheaper to build a house in Alabama?

Compared to the national average of other states, Alabama is ranked the 16th lowest estimated cost to build per square foot according to NewHomeSource.

How much does it cost to build a 1500 square foot home in Alabama?

According to the average cost to build per square foot in Alabama, the cost to build a 1500 square foot house would be around $201,000.

Is it cheaper to buy a house or to build one?

It is definitely cheaper to buy a house in most cases.

How long does it take to build a house in Alabama?

On average, it takes about seven months to build a house according to the U.S. Census Bureau report from 2019.