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Alabama · main city

Buying a home in Birmingham, Alabama

In Birmingham, the median value of owner-occupied homes is $165,500, Jefferson County's effective property tax rate is 0.59%, a purchase mortgage carried a median $5,402 in total loan costs in 2025, and median gross rent is $1,107 a month.

Data as of : Census ACS 2025 1-year, Census Vintage 2024, FHFA HPI 2026Q2, Census ACS 2020-2024, HMDA 2025, HUD FY 2027. Sources

Checked on against the official sources listed at the bottom of the page.

Birmingham home costs, fact by fact

  • Birmingham is the first-named city of the Birmingham, AL metropolitan area. (Census Vintage 2024)
  • That metro area is the 47th largest in the United States, with 1,192,583 residents. (Census Vintage 2024)
  • Birmingham itself counts 196,357 residents. (Census Vintage 2024)
  • The median value of owner-occupied homes in Birmingham is $165,500. (Census ACS 2025 1-year)
  • That figure is what owners estimate their home is worth, not a sale price. (Census ACS 2025 1-year)
  • The FHFA House Price Index shows Alabama prices up 2.8% and Birmingham-area prices up 0.6% between the second quarters of 2025 and 2026. (FHFA HPI 2026Q2)
  • Owners occupy 45.5% of the occupied homes in Birmingham. (Census ACS 2020-2024)
  • Median gross rent in Birmingham is $1,107 a month. (Census ACS 2020-2024)
  • Homeowners in Jefferson County pay a median $1,409 a year in property tax. (Census ACS 2020-2024; Alabama property tax by county)
  • That is 0.59% of the median home value in Jefferson County, its effective property tax rate. (Census ACS 2020-2024)
  • Home-purchase mortgages in Jefferson County carried median total loan costs of $5,402 in 2025, across 5,603 loans. (HMDA 2025; Jefferson County loan costs)
  • Half of those loans fell between $3,543 and $8,354. (HMDA 2025)
  • HUD's Fair Market Rent for a 2-bedroom home is $1,375 a month in its rent area, Birmingham-Hoover, AL HUD Metro FMR Area. (HUD FY 2027)
  • Alabama has no single transfer tax but charges a deed tax of $0.50 per $500 of price (or fraction) and a mortgage tax of $0.15 per $100 borrowed, both paid at recording. (official sources; Alabama transfer tax)
  • Birmingham spreads over 2 counties; the county figures here are for Jefferson County, home to most of its residents. (Census ACS 2020-2024)

Calculate for Birmingham

If you buy

Alabama state transfer tax

Deed tax (privilege or license tax), Code of Alabama 40-22-1: $0.50 per $500 of price, or fraction of $500 (about 0.1%). Change the price: the amount is recalculated instantly.

Price$165,500
State transfer tax$165.50
Share of the price0.1% of the price
Who paysSet by the purchase contract

Default price: the Birmingham median value of owner-occupied homes, $165,500 (Census ACS 2025). Rule: Divide the price by $500, round up to the next whole unit, multiply by $0.50. Instruments of $500 or less pay $0.50. Two-thirds goes to the State and one-third to the county. Who pays: Neither statute says who pays; the sales contract and closing statement assign it. Not included: county and city transfer taxes, the tax on the mortgage, recording fees, title insurance and lender charges. Alabama transfer tax guide · all 50 states.

If you sell

Capital gain and the federal tax on it

Same federal rule in every state: Section 121 of the Internal Revenue Code excludes up to $250,000 of gain on a main home ($500,000 for a married couple filing jointly).

Capital gain$350,000
Section 121 exclusion$250,000 (limit $250,000)
Taxable gain$100,000
Type of gainLong-term (owned over 1 year), 15% chosen
Federal tax on the gain$15,000

Section 121 excludes $250,000; the rest is taxable.

Gain = sale price minus your adjusted basis (purchase price, buying costs and improvements); selling expenses reduce it (IRS Publication 523). Long-term rates for sales in 2026, by taxable income including the gain (IRS Rev. Proc. 2025-32, section 4.03): 0% up to $49,450 single or $98,900 married filing jointly, 15% up to $545,500 single or $613,700 jointly, 20% above. Not included: Alabama state income tax on the gain (not computed), the net investment income tax, depreciation recapture on a rental or home office, and the reduced exclusion for an early sale. Agent commissions are negotiated and never set by law. Capital gains on a home sale.

In short

The median value of owner-occupied homes in the city of Birmingham is $165,500, according to the Census Bureau’s 2025 American Community Survey. The FHFA House Price Index for the Birmingham metro area shows prices up 0.6% between the second quarters of 2025 and 2026. The City of Birmingham offers down payment help of up to $10,000 for homes inside city limits.

How much homes cost in Birmingham

The Census Bureau’s American Community Survey (ACS) asks owners how much they think their home would sell for. The median of those answers is a useful benchmark, but it is not a sale price: it covers every owner-occupied home, including homes bought long ago. Our page on Alabama home prices explains the method in detail.

AreaMedian value, 2025 (ACS)Margin of error (90%)
City of Birmingham$165,500±$13,766
Jefferson County$283,900±$11,682
Birmingham metro area$282,200±$7,666
Alabama$246,500±$3,108
United States$371,100±$646

*Source: U.S. Census Bureau, ACS 1-Year Estimates 2025, table B25077.

The city median is well under the county and metro figures, so the price you pay depends heavily on whether you buy inside or outside city limits.

Are Birmingham prices rising?

The Federal Housing Finance Agency (FHFA) tracks repeat sales of the same single-family homes. Its purchase-only, seasonally adjusted index for the Birmingham metro area, published August 25, 2026, shows:

Area1-year change (Q2 2025 to Q2 2026)5-year change (Q2 2021 to Q2 2026)
Birmingham metro area+0.6%+31.9%
Alabama+2.8%+35.6%
United States+2.1%+33.4%

Source: FHFA House Price Index, quarterly purchase-only files. Changes calculated by Payotte from the published index values.

Prices in the Birmingham area were nearly flat over the past year, after a gain of almost a third over five years.

Closing costs, property tax and transfer tax

On top of the price, buyers and sellers pay closing costs: lender fees, the appraisal, the survey, recording fees and title insurance. Several of these depend on the loan and on the providers you choose, so we do not repeat figures on this page. Read these Alabama guides instead:

To see how property tax can be paid through your monthly mortgage payment, read our guide to escrow accounts.

Help for buyers in Birmingham

The City of Birmingham’s Community Development department runs the Ready to Own program for qualified households buying a home within city limits. According to the City’s page:

  • Assistance of up to $10,000 as a 5-year forgivable loan at 0% interest, with a restrictive covenant.
  • Funds can go toward the down payment, closing costs and interest rate buydowns.
  • Minimum credit score of 600, household income at or below the HUD limit at 80% of area median income, and a homeownership education course.

At the state level, the Alabama Housing Finance Authority’s First Step income limits for the Birmingham-Hoover area, effective June 24, 2026, are $104,100 (one or two people, non-target areas) and $124,920 (target areas). Our guide to first-time buyer programs in Alabama compares the options.

Storms and insurance

FEMA’s records list Jefferson County in 26 major disaster declarations for storms, tornadoes, floods or hurricanes since 1970, the latest in the data being the severe storms and flooding of October 2021. Home policies do not cover flood, and the coast’s insurer of last resort does not serve Jefferson County. The state’s Strengthen Alabama Homes program, which pays up to $10,000 for a FORTIFIED roof, opened for Jefferson County once, on November 4, 2025. Details are in our guide to natural hazards and insurance in Alabama. Our flood insurance guide explains the federal policy.

Alabama guides for Birmingham buyers

Frequently asked questions

What is the median home price in Birmingham?

The Census Bureau’s 2025 American Community Survey puts the median value of owner-occupied homes in the city of Birmingham at $165,500 (±$13,766). This is what owners think their home is worth, not the median sale price of recent sales.

Are home prices in Birmingham going down?

According to the FHFA purchase-only index, prices in the Birmingham metro area rose 0.6% between the second quarter of 2025 and the second quarter of 2026, which is nearly flat. Over five years, they rose 31.9%.

How much does Jefferson County differ from the city?

The 2025 ACS median value is $283,900 for Jefferson County and $282,200 for the Birmingham metro area, against $165,500 for the city itself.

Does Birmingham help first-time buyers?

Yes. The City’s Ready to Own program offers up to $10,000 as a 5-year forgivable loan for homes inside Birmingham, for households at or below 80% of area median income who complete a homeownership course.

Is flood insurance included in a Birmingham home policy?

No. The Alabama Department of Insurance states that standard home insurance does not cover flood damage. Flood cover is bought separately, from the National Flood Insurance Program or a private insurer.

More Alabama guides

Sources

Questions about buying a home in Birmingham

How much is property tax in Birmingham?

Homeowners in Jefferson County pay a median $1,409 a year in property tax, 0.59% of the county median home value of $240,000 (Census ACS 2020-2024). Your bill depends on your assessed value and local rates.

What are closing costs on a mortgage in Birmingham?

Home-purchase mortgages in Jefferson County carried median total loan costs of $5,402 in 2025; half of the 5,603 loans fell between $3,543 and $8,354 (HMDA). Total loan costs are the lender and settlement-service charges of the Closing Disclosure; transfer taxes and prepaid items come on top.

Is there a transfer tax when you buy a home in Birmingham?

Alabama has no single transfer tax but charges a deed tax of $0.50 per $500 of price (or fraction) and a mortgage tax of $0.15 per $100 borrowed, both paid at recording. The statutes do not say whether buyer or seller pays.

Is it cheaper to rent or buy in Birmingham?

It depends on your mortgage rate, down payment and how long you stay. As a benchmark, the median value of owner-occupied homes in Birmingham ($158,800) equals 12 years of the median gross rent ($1,107 a month), both from Census ACS 2020-2024.

What natural hazards affect home insurance in Birmingham?

Across Alabama, the main hazards for home insurance are hurricanes, tornadoes and flooding, and the insurer of last resort is Alabama Insurance Underwriting Association (AIUA), for eligible property in Baldwin and Mobile counties. Standard Alabama home policies do not cover flood; an NFIP policy covers up to $250,000 for a home and $100,000 for belongings, and the Strengthen Alabama Homes program offers grants of up to $10,000.

Run your own numbers: rent vs buy calculator · closing costs calculator.

Professionals by sector of Birmingham

Who licenses each trade in Alabama

Other large cities: see cities in Alabama.

Data sources for the figures above

Alabama · All states · Federal guides