It’s “Back to the Future” Day, and in honor of this joyous occasion we decided to take a look at how Marty McFly’s home was affected over the span of 30 years. According to Redfin Agent John Underwood’s calculations, the Hill Valley home* has risen from an estimated value of $180,000 in 1985 to $400,000 in 2015. Despite the jump in value, the mortgage payment on the home actually decreased between the two time periods, dropping from $1,527** in 1985 to $1,497** in 2015. How is this possible?
In 1985, mortgage rates averaged 12.43 percent, according to Freddie Mac. So far this year, they’re hovering around 3.83 percent. Heavy.
Think of it like lightning striking. Never in the recorded history of Earth have borrowing costs been this low, and never before has the U.S. had such a long run of rock-bottom mortgage rates.
Our time-traveling hero’s saga is a great example of why homebuyers shouldn’t panic about a potential rise in interest rates.
“Because prices are a lot higher, low rates matter to buyers even more,” Redfin Chief Economist Nela Richardson said. “Even when mortgages hit 5 percent, borrowing will still be cheap compared to 30 years ago.”
What do you think about the McFly home value and mortgage rates? Let us know by leaving a comment below or on our Facebook or Twitter accounts.
*9303 Roslyndale Ave in Arleta, Cal., was the actual home used during filming. https://www.redfin.com/CA/Arleta/9303-Roslyndale-Ave-91331/home/5646808
**Assumes 20 percent down, 30-year, fixed-rate mortgage.The 1985 mortgage rate used is 12.43%. The 2015 rate used is 3.83%. http://www.freddiemac.com/pmms/pmms30.htm
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