“Look at those prices!”

That’s probably the #1 comment I hear from people as they browse the pages of an old Sears Modern Homes catalog.

Why were Sears kit homes priced so incredibly low?

Well, they weren’t really. Like everything else in history, the prices of early 20th Century housing have to be looked at in context.

One context to consider is taxation. In 1918, only the very wealthy paid federal income tax. In fact, only 5% of Americans paid any income tax at all. If your employer paid you $15 a week, you took home $15 a week.

The other issue is inflation. Pervasive, savings-eroding inflation has not always been a way of life in America.

In the 1930s, President Franklin D. Roosevelt took the first step that moved us off the gold standard. It was a desperate attempt to re-inflate the sagging dollar. In 1933, Roosevelt issued Executive Order #6102, requiring Americans to deliver their gold to the Federal Reserve.

At the time, law required that Federal Reserve notes (aka “dollars”) had to be backed by 40% gold reserves held in the vaults at the Federal Reserve. That was our first disconnect from a true gold standard. The second came in 1971 when President Nixon permanently disconnected us from the gold standard.

After that, the Federal Reserve was free to print as much money as they felt was needed. And it was (not coincidentally) in the 1970s when inflation hit double digits.

A stable (non-inflating) economy made it far easier for people to save up their dollars over a period of years and eventually purchase a home. (Inflation rewards those who borrow and penalizes those who save.) In the early 1900s, taking on debt of any kind was considered foolhardy, dangerous and even reckless.

There was no “rush to buy” because the price of housing (and the value of dollars) was fairly stable. Young couples took their time and often spent many, many years saving up to buy a home.

The third historical context that needs to be considered is simplicity. Take a look the Sears Kismet (shown below). This house has 520 square feet with two bedrooms that measure 8′ by 9′. I’m not sure, but I think a FEMA trailer is bigger than that.

The fourth issue is building codes (a subset of simplicity, really). It was estimated that a kit home cost 30-40% less than a comparable stick-built home. The average joe could order his dream home out of the Sears Roebuck catalog, and within 90 days, his 12,000-piece kit would be delivered to the train station. Many locales did require building permits, but it was nothing like the process is today.

The building permit was – above all – a way for the city/county to make sure that no opportunity for new taxes was overlooked.

Homeowners often installed their own plumbing, electrical, heating and mechanical systems.  And these systems were simple. Fuse boxes were 30-amp service, with one outlet in each room (if that!). Plumbing consisted of a sink in the kitchen and one bathroom. Maybe. Heating systems were often “pipleless” which was a nice way of saying it was a massive space heater in a center hallways.

Houses were much smaller and simpler, and building codes were quite lax.

Still want an $800 house?  🙂

Dollar for dollar, the Katrina Cottages offered by Lowes were comparable. These were very basic, very small kit homes selling for $20,000 or so (depending on model). Interestingly, they’re no longer available.

The world has changed since Sears first offered these kit homes in 1908. Most folks today would not find The Kismet suitable. And how many people have the skills to build a 12,000-piece kit? And I don’t know of any city in America where you could build a small house without a whole lot of government intrusion and/or oversight.

But I digress.

The main point is, wages in the 1910s and 1920s were a fraction of today’s incomes. According to American Carpenter and Builder Magazine (December 1912), skilled carpenters in Chicago were earning 65 cents an hour and plumbers were making 75 cents an hour.

In the early days, Ladies’ Home Journal was a magazine devoted to helping women get into a home of their own. Each issue was filled with stories from people who had overcome financial adversities and bought or built their own house on tiny incomes.

Some stories had headings such as, “How a wife did it herself,” and “Bought her own home with nine children and $800 a year income.”  These stories paint a vivid word picture of how much toil and sacrifice pre-World War I families endured to have a home of their own.

The following story appeared in the October 1903 Ladies’ Home Journal and was the winning entry for the magazine’s series, “How some families have saved for their own homes.”

It’s a wonderful story that really demonstrates the sacrifice involved in purchasing a home at the turn of the last century. The wages mentioned in this piece lend some additional insight to the dollar values of the day, and help explain the low prices of homes offered in the Sears catalogs.

We planted a garden and my husband worked it himself. He [arose] every morning at about four and worked [in the garden] until time to go to the shop – about two hours.  We’d sell the vegetables at market, keeping only a minimum for ourselves.

We could not afford to buy a sewing machine, so I rented an old-fashioned hand machine at $3 a year and had to turn the wheel with one hand and guide the work with the other.  I would sew every night (taking in work for hire) never retiring earlier than one o’clock.  I got up at five every morning.

So much work came to me that [many] nights, I would sit up until daybreak, snatch an hour’s nap, then get up to cook breakfast  My husband would get up when I retired, work his garden, split the wood, build a fire in the kitchen stove, bring in enough water for the day (we had no well) and then set the coffee pot to boil. I did the washing and ironing and made my own soap.

Three years thus rolled away. My husband’s wages went up to $8 a week but we still practiced the most rigid economy and cut off some of our necessities. Our cow had a calf and when he was one year old, we killed him and sold the meat.

To clothe my little boy, I took my husband’s cast-off clothing, turned it wrong side out and cut out the best portions, making the boy’s clothes.

At the end of seven years, my husband’s wages had increased to $9 a week. After seven years of struggle and extreme economy, toil and labor, today finds us with a comfortable home, horses and cows.

As for myself, before my marriage I never knew the value of money as I was the petted daughter of a rich man.

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