What a Potential Labor Crisis Could Mean for Homeowners

In the last few years, economic experts have been predicting that we may soon face a labor crisis as skilled industry professionals are aging out of the workforce and fewer young people are choosing trade jobs.

By 2027, the United States is projected to be short 550,000 plumbers. But it’s not just plumbers facing this issue — one in five construction workers are 55+, and nearly 30% of unionized electricians are nearing retirement. Not only does this mean there are fewer workers overall, but workers on the job are also less experienced.

How a Labor Crisis Affects Homeowners

So how does this affect homeownership? For one, a big decrease in plumbers, construction workers, and electricians could drive demand and cost up, as well as extend wait times for repairs and renovations.

The national average cost to hire a plumber has already been on the rise, increasing 50% from 2019-2023. Combined with the fact that some building material costs still haven’t stabilized since the pandemic created supply shortages, you can understand why some repairs will continue to put a financial strain on homeowners.

3 Ways Homeowners Can Prepare for Rising Labor Costs

In the wake of this impending labor crisis, there are ways for you to stay on top of the costs of repairs and renovations as a homeowner while protecting and growing your home’s value and equity.

1. Increase your home maintenance budget: As a homeowner, you’re going to face unexpected repairs and costs. Think about increasing your home repair budget so that if the need arises, you have the necessary funds to pay for higher labor costs. Most experts advise that you save 1-3% of your home’s value annually for this purpose. The closer you can get to the higher end of that savings goal, the more equipped you’ll be to handle pricier repairs.
2. Improve your DIY skills: There’s never been a better time to get handy around your house. Doing certain projects yourself to maintain your home can lower some of the costs associated with hiring an outside service for plumbing or electrical work. There may be local workshops to help you get hands-on practice for everyday skills, too!
   
   Consider asking around your local hardware store. Of course, there are also endless online training opportunities. When you DIY, Just be sure that you can confidently complete the task. Certain projects should always be handled by skilled professionals, both for your own safety and to avoid more expensive repairs down the road.
3. Pay more now to save more later: Adopt energy-efficient water conservation systems. While these newer systems may have higher initial installation costs, they are often more efficient and require fewer servicing visits for toilets and septic systems over time.

Making smart choices about your renovations and repairs may also help you combat rising expenses. Schedule maintenance in the off-season if possible to keep costs and timelines down, continue to get multiple quotes before hiring a professional, and use the tools in Hometap’s Home Equity Dashboard to better understand your home’s value, your home equity, and estimated ROI (return on investment) for common improvements so you can prioritize projects.