What Gives Pumpkin Spice Latte Prices The Right To Rise Faster Than Home Prices? It’s a Travesty
There’s a true crime happening in the economy and no one is paying attention: Pumpkin Spice Latte prices are rising faster than home prices.
The price of the Starbucks fan favorite has risen 94% since 2005 according to Money.com. Home prices have only risen by 73% during the same period says the Census Bureau and HUD.
A grande “PSL” now costs $6.50, up from $3.35 in 2005. The median-priced home hit $420,400 as of the third quarter of 2024, rising from $243,600 in 2005.
What gives Starbucks the right to have a product that is rising in price faster than homes? Houses should be the undisputed champ of high prices. Yet, homes are not keeping up with the near-doubling in cost of PSLs since the mid-oughts.
But the travesty doesn’t end there.
Since 2022, home prices have fallen 5%. Meanwhile, PSLs have not dropped at all, but taken off an additional 9%. There’s no respect for home prices anymore.
The good news is that Starbucks’ new CEO, Brian Niccol, plans to shake things up. “We're definitely hitting the pause button for this year," Niccol said to Yahoo about the coffee chain’s prices. This strategy is no doubt rooted in the desire to give homes a chance to restart another epic price jump.
But Starbucks’ evil plot to outdo home prices is having more of an effect than just utter disrespect for the housing market.
PSL costs are also causing the lowest first-time homebuyer share in the market ever recorded. According to the National Association of Realtors, first-time buyers made up just 24% of home purchases, down from 32% last year.
The low participation is certainly due to young homebuyers splurging on their daily $6.50 Pumpkin Spice Latte.
At today’s drink prices, one PSL per day will set back a young homebuyer $195 per month. Assuming a 7% interest rate, a homebuyer could use that to add about $30,000 to their maximum house buying budget.
Can’t find a home to buy? Settle for a Mickey D’s roast, only 99 cents in the app.
Never mind that the typical home price has risen over $100,000 since 2020, or that, combined with interest rate increases, a house payment is up by $1,500 per month since then, eating about half the median household income.
Pumpkin Spice Latte prices are clearly to blame for today’s housing affordability crisis. The drink started by disrespecting the undisputed king of price increases, but ended by taking away young people’s opportunity to partake in them.
And while this article is created with a healthy dose of sarcasm, the numbers and figures are all correct. The good news is that you can find ways to buy a house, even if you do indulge in a good PSL once in a while. In fact, you can start here.
