Alabama Is Winning in Affordability and Homebuilding: Can Gov. Ivey Keep It Going?

Alabama continues to stand out as one of the most affordable states to buy or build a home.

The state earned a B- on Realtor.com® State-by-State Housing Report Card , reflecting strong affordability and steady construction activity.

As part of the Let America Build campaign, the report evaluates how each state balances the cost of homeownership with the pace of new construction.

The rankings were released in February. Since then, President Donald Trump has put pressure on large homebuilders to increase construction nationwide. In a post on his Truth Social platform in early October, he accused major builders of hoarding lots to prop up prices—likening them to OPEC, which restricts oil output to maintain high prices.

“They’re my friends ... but now, they can get Financing, and they have to start building Homes. They’re sitting on 2 Million empty lots, A RECORD,” Trump wrote. He urged Fannie Mae and Freddie Mac to intervene and “get Big Homebuilders going” to “restore the American Dream.” 

But is this a feasible task? And how has Alabama managed it thus far?

A solid showing in the South

Alabama posted a total score of 60.2, putting it comfortably in the upper range of the national rankings. The state’s median listing price of $328,950 remains well below the national average, while its median household income of $60,578 gives residents a better shot at homeownership than in many other regions. The Realtor Affordability Score came in at 0.71, underscoring that a large share of Alabama’s listings are within reach for typical earners.

On the construction side, Alabama accounted for 1.4% of all new home permits nationwide in 2024—roughly in line with its 1.5% share of the U.S. population. That balance gives the state a healthy permit-to-population ratio, showing that builders are keeping pace with demand. The new construction premium, or the price difference between new and existing homes, was a modest 16.7%, suggesting that new homes remain relatively affordable compared to resale listings.

A great showing in Alabama, especially when the country at large is falling behind.

“America is short more than 4.7 million homes, and every new home built helps close that gap while fueling local economies," says Shannon McGahn, executive vice president and chief advocacy officer at the National Association of Realtors®.

"NAR research shows that the U.S. has faced a persistent housing shortage for more than a decade, driving up prices and limiting options for buyers. Expanding housing supply creates jobs, supports small businesses, and affords families the opportunity to build generational wealth.”

Regional perspective

According to the Realtor.com New Construction Insights 2025Q2 report , the South continues to dominate the nation’s homebuilding landscape. The region leads in both affordability and supply, with more new listings coming to market than any other part of the country. Nationally, the median listing price for new homes was $450,797, nearly flat year over year, while existing home prices climbed 2.4%. That has narrowed the national new construction premium to just 7.8%, the lowest level ever recorded.

Southern states like Alabama have benefited from an active construction pipeline that keeps prices in check. The report notes that the South is home to a majority of all homes for sale nationwide—both new builds and resales.

This supply advantage has helped states across the region earn higher marks, while states in the Northeast and West struggle under higher costs and tighter zoning restrictions.

Governor Ivey invests in housing skills and supply

Alabama’s high marks show that smart policy and steady building go hand in hand. Governor Kay Ivey has made workforce development a priority when it comes to her administration’s housing strategy.

In 2025, she signed House Bill 335, a bipartisan measure creating dedicated funding for Home Builders Association of Alabama-recognized Home Builder Academies. These academies train future construction workers in the fundamentals of the trade—addressing one of the biggest challenges facing builders nationwide: labor shortages.

The bill allows local funding to flow directly to these academies under the oversight of the Alabama Home Builders Licensure Board. “We’re grateful for the Legislature’s partnership in strengthening Alabama’s workforce,” the Home Builders Association of Alabama said in a statement. “This investment ensures we have skilled workers ready to meet our state’s growing housing demand”.

By supporting local training and certification programs, Ivey’s initiative aims to expand the pool of qualified tradespeople while keeping homebuilding costs low.

The National Association of Home Builders’ Blueprint to Address the Housing Affordability Crisis calls workforce development one of the top priorities for solving the nation’s housing shortage. Alongside reducing regulations and improving supply chains, NAHB stresses the importance of investing in skilled labor to “remove barriers that hinder the construction of new homes and apartments”.

This article was produced with editorial input from Dina Sartore-Bodo and Gabriella Iannetta.