Some of the very best horror movies of all time are based on actual events. Take Psycho, The Texas Chainsaw Massacre, and Silence of the Lambs, for example, three of the scariest horror movies of all time are based on the horrible killings of a single man, Ed Gein. Independently, the three films tell horrifying tales of mass murder, torture, and cannibalism, but put them all together and you get a look at serial killer Ed Gein.
Of course, in many cases, the fiction is a stretch on the actual facts such as in the haunted house horror films. In The Amityville Horror, The Haunting in Connecticut, and The Entity, families were haunted by demons in their own homes.