Forget Hoverboards The Future Has Brought Something Much Cooler Cheap Mortgages

Dated: 10/21/2015

Views: 662

The McFlys were living in a modest mid-century in 1985 when Marty strapped into his DeLorean and zoomed back to the future today, Oct. 21, 2015.

According to our calculations, over those 30 years the McFly house in fictional Hill Valley (and near L.A. in real life) more than doubled in value, from $180,000 to $400,000 (h/t to Redfin agent John Underwood for the estimates).

And yet, if the McFlys had bought their house today, their mortgage payment would actually be lower, at $1,497 a month compared to $1,527 three decades ago. How can that be?

Assume the McFlys put 20 percent down on a 30-year, fixed-rate mortgage. In 1985, 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 recorded history have borrowing costs been this low   and never before has the U.S. had such a long run of rock-bottom mortgage 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.”

This era of low rates won’t last forever. Then again, who knows what the market might look like 30 years from now. Maybe Doc and Marty can go take a peek.

Blog author image

Michelle Cantrell

Michelle is a native of Southwest Missouri and has twenty-five years of experience in selling real estate in the greater Springfield area! Michelle specializes in all price points, including new const....

Want to Advertise on this Site?

Latest Blog Posts

2018 The Thousand

The Michelle Cantrell Group made the list of '2018 The Thousand' top real estate teams! The Thousand, which is advertised in The Wall Street Journal, is a REAL Trends exclusive ranking of the top

Read More

Sunflower Festival Begins To Bloom

Golden Grove Farms’ Sunflower Festival kicks off July 17. Family-friendly atmosphere meets beautiful venue as attendees cut their own flowers, participate in games and crafts and listen to live

Read More

1645 North Eagle Valley Nixa

 For more information on this property, click .

Read More

HBA Parade Of Homes 2018

It’s time for the HBA Parade Homes! This is an annual event and will be held June 15th - 17th and June 22nd - 24th from 1pm - 6pm. Tickets cost $5 and will allow entry into all HBA Parade Homes.

Read More