Cost of Living in the 1920s: What a Dollar Bought

The Roaring Twenties were a decade in which the price of almost everything ordinary Americans bought either stayed flat or fell, while wages rose modestly and the new installment plan made the most expensive items — houses, cars, furniture, refrigerators — available to people who could not have dreamed of owning them a generation earlier. For the broader context, see the parent daily life in the 1920s; for the clothes these prices bought, ; and for the household economics,

Wages: What Americans Earned

The average factory wage in 1920 was about $26 per week, or roughly $1,350 per year for a full-time worker. Skilled tradesmen — plumbers, electricians, machinists — earned $35 to $50 per week, or $1,800 to $2,500 per year. The average teacher earned about $1,200 per year, and the average engineer or junior executive earned $2,000 to $3,000. The median family income in 1929 was about $2,000 per year, but the bottom 20 percent of families earned less than $1,000, and the top 5 percent earned more than $5,000. The richest 1 percent received about 19 percent of all income, a share that would not be reached again until the 1990s. A new Ford sedan cost $525 in 1928, the average Ford worker earned about $5 per day, and the ratio of car price to annual income was a little over 1:1 — making the Model T and Model A among the cheapest cars in the world.

Housing: A House for $5,000

The single largest purchase most American families ever made was their house. In 1920, the typical new single-family home in a growing suburb cost $4,000 to $8,000, with a smaller house in a small town costing as little as $2,500. A modest four-room bungalow in a new subdivision could be bought for $5,000 in 1925 — equivalent to roughly $80,000 in 2020s dollars, a striking contrast to the $400,000-and-up median price of a new American home in 2024. Most new houses were sold on mortgage, with a down payment of 10 to 25 percent and a loan term of five to ten years. The typical monthly payment on a $5,000 house with a 20 percent down payment and a 6 percent interest rate was about $50.

Food: A Loaf of Bread for 9 Cents

The cost of food in the 1920s was, by modern standards, astonishingly low. The 1920s were a period of agricultural overproduction, and grocery prices were correspondingly cheap. A loaf of bread cost 8 to 10 cents. A dozen eggs cost 30 to 50 cents. A pound of butter cost 50 to 60 cents. A pound of bacon cost 40 to 50 cents. A gallon of milk cost 50 to 60 cents in most cities. A pound of coffee cost 35 to 50 cents, and a pound of sugar cost about 10 cents. A pound of round steak cost 35 to 45 cents; a whole chicken about 60 to 80 cents. A family of four could eat reasonably well for about $15 to $20 per week, or roughly $800 to $1,000 per year. The new chain grocery — A&P, Kroger, Safeway — kept prices low by replacing the old corner grocer with a more efficient model. The 1920s were, for ordinary Americans, the cheapest decade for food in the twentieth century.

Clothing: A Suit for $30

The cost of clothing was also low. A man’s wool suit cost $25 to $40, with the cheapest ready-made suits available for as little as $15. A woman’s dress cost $5 to $20, with the typical ready-made day dress selling for $10 or less. A pair of men’s shoes cost $5 to $8, and a pair of women’s shoes cost $4 to $10. A cotton shirt cost $1 to $2, a silk tie about 50 cents to $1, and a straw hat $1 to $3. The ready-to-wear industry was now in full swing: by 1929, the average American family spent about 12 percent of its income on clothes, down from roughly 18 percent in 1910. The flapper silhouette was within reach of almost every working woman. For the details of the styles, see our 1920s fashion and clothing page.

Entertainment: A Movie for 15 Cents

The 1920s were the first decade in which entertainment became a major category of household spending. A movie ticket cost 5 to 25 cents, depending on the theater. The great movie palace — the 3,000-seat Roxy Theatre in New York, the Chicago Theatre, the Fox Theatre in Detroit — charged 25 to 50 cents. A phonograph record cost 75 cents to $1, and a new radio set cost $25 to $200 when commercial broadcasting began in 1920, dropping to under $100 by 1929. A hotel room cost $2 to $5 per night, and a restaurant dinner with a drink cost $1 to $3. A speakeasy drink cost 25 to 50 cents. For the wider story of 1920s entertainment, see the motion picture industry in the 1920s and radio broadcasting in the 1920s.

Transportation: A Model T for $260

The most dramatic change in the household budget was the cost of transportation. The Model T Touring was $260 in 1924, and the Runabout was $245. A Ford sedan cost $525 in 1927, and a comparable Chevrolet about $600. The most expensive American cars — the Cadillac, the Lincoln, the Packard — cost $2,500 to $6,000. A gallon of gasoline cost 18 to 21 cents, and a streetcar fare 5 to 7 cents. The monthly note on a new car bought on installment credit was typically $25 to $40, with a down payment of about a third. The story of the affordable Model T is told in our Henry Ford and the Model T coverage.

The Installment Plan: Buy Now, Pay Later

The single most important financial innovation of the 1920s was the modern installment plan. By 1929, about 60 percent of all furniture, 55 percent of all radios, and 75 percent of all cars were bought on installment credit. The total volume of installment debt grew from about $1 billion in 1920 to more than $6 billion by 1929 — a sum larger than the federal budget of the United States. The installment plan made the consumer economy of the 1920s possible — but it also left American families more exposed than ever to a downturn in income. The story of how the installment economy unraveled in 1930 and 1931 is part of the end of the Roaring Twenties and the causes of the Great Depression. The deeper story is told in our rise of consumer credit in the 1920s and installment buying in the 1920s.

Rural vs. Urban Prices

The prices above are urban prices. Rural Americans often paid different prices. Food was cheaper in the country — many farm families grew their own vegetables and raised their own chickens. Housing was cheaper: a frame farmhouse in Iowa in 1925 might cost as little as $1,500 to build. But many other things were more expensive, including gasoline, clothing, and especially the new consumer goods that had to be shipped in from the city. The country-to-city gap in living standards was real, and the 1920s were a period in which the urban middle class was pulling ahead of the rural population. The agricultural depression that began in 1920 and never really ended was the rural counterpart of the urban boom, and it was the most important economic fact the country was hiding.