Design October 1, 2025

9 Options to Remove, Hide or Play Down a Popcorn Ceiling

Don’t love your popcorn ceiling? You’re not the only one stuck with some unwanted stucco overhead. There are many options for moving on from it, but not all of them are equally effective—or equally easy. To help you decide how to address your popcorn problem, here are some top ways to remove, cover or distract from stucco ceilings.

 

A bathroom with a popcorn ceiling and decorative tile.

The Kitchen Source, Houzz

 

History of the Popcorn Ceiling

From the 1950s to the 1980s, so-called popcorn ceilings (with their prickly stucco texture resembling the popular movie theater snack) were a major architectural staple in America and many other nations. Eventually the asbestos commonly used in the application was found to be toxic, and demand severely dropped. However, a textured ceiling does have its advantages. It reduces echoes and hides ceiling plane imperfections, which is why it’s still used (in asbestos-free formulations) today, as shown in the bathroom here. Despite its practical uses, popcorn ceilings, for many people, are considered an unfashionable eyesore, especially with contemporary demand for “clean lines.” Also, popcorn ceilings can gather dust and be difficult to clean or repaint, which means they don’t always age beautifully. But don’t worry. You’ve got plenty of options.

 

A living room with a popcorn ceiling and traditional interior design with blue tile vases and lamps and a modern glass coffee table.

Gia Interior Design, Houzz

 

Ceiling Scraping

The good news is a sprayed-on stucco coating can be scraped off to reveal the original ceiling surface, a process usually known simply as “ceiling scraping” or “stucco removal.” A specialist typically does this because (here’s the bad news) the process can be somewhat costly at around $1 to $2 per square foot. It’s a messy, labor-intensive process, hence the high cost.

Also, in some cases, the results may not achieve the crispness of a ceiling that had not been stuccoed in the first place, especially if the stucco has been painted over, which greatly complicates the removal process. Even in the best cases the exposed ceiling will typically require at least some smoothing and patching to create a more even and crisp final product, which makes this an extensive and relatively challenging undertaking for DIYers.

While ceiling stucco no longer uses asbestos in modern applications, homes built before 1980 (or even in the early ’80s while old stucco products were still stocked) may include asbestos. If there is any doubt, a professional asbestos test should be conducted before any resurfacing, which could release heavily toxic dust.

Ceiling Replacement

One of the simplest alternatives to scraping is removing and replacing the ceiling drywall. Alternately, you can have the ceiling layered over with new drywall. The drop in the ceiling plane will often be minimal, and this method can encase asbestos rather than releasing it into the air, delaying the issue, if not resolving it. Re-drywalling a ceiling will cost closer to $4 to $6 per square foot, but the results will be more predictable.

Covering Stucco

Speaking of layering, there are many other materials besides drywall that can be installed over a popcorn ceiling, many of which add extra personality to a room. For more info, read Keep Your Cottage Cool.

Beadboard

Classic beadboard makes a charming ceiling treatment, and not just in a rustic cottage. Painted white, the subtle texture of beadboard paneling works well in traditional spaces or modern ones, adding a layer of depth in an unconventional place. Panels of beadboard often cost less than 50 cents per square foot, making this a very affordable option, especially for handy DIYers. For a contemporary twist, try finishing the ceiling in a gloss paint, as shown here. This slow-drying finish will take more labor to complete, but the results have incredible depth and elegance.

 

A bedroom with beadboard, a common alternative for a popcorn ceiling.

Spinnaker Development, Houzz

 

Warm Wood

If you’re not into painted beadboard, try multitonal wood for a rich, inviting treatment that’s great for a den or sitting area. Contrast it with white molding and crossbeams, or let the wood speak for itself. This approach works well with rustic decor, as a gentle touch in a modernist space or somewhere in between.

 

A kitchen with a warm wood ceiling, white cabinets, and shiny hardwood floors.

Bravehart Design Build, Houzz

 

Pressed Tin

Whether you use true pressed tin tiles or a fiber substitute, this classic ceiling look recalls speak-easy style and makes a great cover-up for a kitchen ceiling. You can paint it white or pale gray to keep the look breezy, or an inky dark hue (like charcoal or navy) for moody atmosphere. Or choose a metallic finish for extra sheen and drama. Many companies now provide faux pressed tin and other panel systems specifically designed to cover stuccoed or damaged ceilings. They typically cost $1 to $5 per square foot. To have a professional install these materials for you, expect to pay several hundred dollars extra.

 

A bedroom decorated with pressed tin and modern decor.

The Morson Collection, Houzz

 

Other Options

  • Lighting: Sometimes the best way to deal with ceiling stucco is to de-emphasize it, and smart lighting choices can go a long way toward that. Notice how the lighting hitting this stucco wall emphasizes the texture. Great when the effect is desired. To avoid highlighting unwanted ceiling stucco, choose lights that aim downward, rather than upward or outward, so light is cast on beautiful surfaces below and not on your ceiling itself. Try pot lights, or semi-flush-mounts (or pendants) with an opaque shade to aim light downward rather than multiple directions.
  • Paint: Ultimately, the best way to deal with a popcorn ceiling may simply be to learn to live with it. Think about it: How many people do you know who live with popcorn ceilings? I bet you can’t specifically remember who has it or doesn’t, because unless a ceiling is highlighted, we don’t typically spend much time looking at it.

Try painting the walls and the ceiling the same color to blur the lines between them, and then create drama at ground level to draw the eye down. You’ll soon forget about your stucco altogether.

By Yanic Simard, Houzz

 


Featured Image Source: Getty Images | Image Credit: ucpage

Buyers September 30, 2025

Ten Qualities to Look For in Your Real Estate Agent

Buying a home is one of the most significant financial and emotional purchases of a person’s life. That’s why it is so important to find an agent that can not only help you navigate the home search process while answering your questions and addressing your needs from start to finish. Most importantly, your agent should care about your happiness and ensuring that you find the right home for you. Here are some important qualities to consider when selecting a real estate agent.

10 Qualities to Look for in Your Real Estate Agent

1. Likable: More than likely, you will be spending significant time with your agent. You’ll be side by side throughout the ups and downs of the buying process, so it’s worth it to spend time looking for someone that you enjoy interacting with. Working with a Buyer’s Agent

2. Trustworthy: One of the best ways to find an agent who you feel you can trust is to ask friends and family for a referral. You can also interview different agents and ask for client references. When vetting agents, prioritize their trustworthiness along with their business acumen and ask questions that will help you narrow your search. If you’re having trouble knowing where to begin. Here are a few common questions you can ask to get the conversation started:

    • How do you help buyers to make their offer stand out?
    • How many clients are you working with currently?
    • What is the best way to contact you?
    • How long have you been an agent in the local market?
    • Do you represent both buyers and sellers?
    • Do you have recommendations for mortgage brokers, home inspectors, etc.?

3. Effective Listener: While your agent can’t read your mind, they should be able to make educated recommendations and offer advice by listening closely to your needs. Make sure you talk to your agent about your priorities, what types of features appeal to you, as well as any factors that could be deal breakers. This will equip your agent with everything they need to help find you the perfect home as they explore the Multiple Listing Service (MLS) for available listings.

4. Qualified and Experienced: Make sure your agent has the qualifications and experience to meet your specific needs. For example, some agents have more experience with short sales, while others might be experts on certain neighborhoods or types of housing. Find someone who is good at what you’re looking for. Ask specific questions when you interview them so you can get a better idea of what they’re great at, and if they’ll be a good fit for your search. For a comprehensive list of real estate agent certifications, visit our blog:

5. Knowledgeable: A great agent is someone who is out in the neighborhoods, exploring communities, visiting listings, staying up to date with market and industry news, and collecting all the information that you need to make an informed, confident decision about your real estate needs. For up-to-date information about your local market, visit the Market News category of our blog.

6. Honest: Your agent should be upfront and honest with you about every aspect of your home search process—even if it involves delivering bad news. The best real estate agents are more concerned about finding the right home for their clients, not just the home that brings in the fastest commission check.

7. Local: Every community is different, and all real estate is local, so it’s important to find someone who really knows the local market and can provide you with the information you need to familiarize yourself with a particular area. This will narrow your home search and help you find listings you can afford.

8. Connected: A well-connected agent will have relationships with lenders, inspectors, appraisers, contractors, and any other service provider you might need during your home search. Though your agent will be your greatest asset in the home buying process, it takes several people to successfully purchase a home.

9. Straightforward: You want an agent who will work hard to help you find the best home, but you also want someone who will be straightforward with you about the process and how to set realistic expectations given the market conditions in which you’ll be buying.

10. Committed: Your agent should be in it for the long haul, meaning that they’re looking out for your best interests every step of the way, no matter how long the process takes. Connect with a local, experienced Windermere Real Estate Agent today:

 


­­­­­­Featured Image Source: Getty Images – Image Credit: skynesher

Events September 25, 2025

Community Reuse & Recycling Event Coming Up Next Month

Real Estate Listings September 23, 2025

NEW LISTING: Historic Craftsman on Large View Lot

9733 Arrowsmith Avenue S
Seattle, WA 98118
Listed at $1,050,000

  • MLS #2432931
  • CLIP #4024769488
  • Beds: 5
  • Baths: 4
  • Size: 2,740 sqft

Rare opportunity! Historic Craftsman on large estate lot with Lake WA views in prime Upper Rainier Beach neighborhood. Platted in 1891 by Charles Waters, these quiet sylvan lots are coveted for their views and privacy, designed as park-like blocks with towering evergreens. This is an elegant showcase of quality 1900’s finishes, built for posh living and entertaining. Soaring ceilings, rich hardwoods, boxed-beamed ceilings, wainscoting-all orig. millwork. Palatial living spaces, formal dining+ butler’s pantry, cheerful garden room, skylights, lots of decks / lush gardens / patios. 5 bedrooms / 4 baths, 2 kitchens, finished MIL apartment, gas heat, A/C. Stroll to favorite coffee shops, eateries, parks & rec; close to Lite Rail. A great beginning for your own legacy.

Click here for more information.

Living September 18, 2025

5 Tips for a Tidy Home

Maintaining a tidy home not only helps it to look its best, but it also makes for a more peaceful and organized living environment. Regardless of the size of your home, these tips will help you achieve and maintain a consistently tidy and inviting living space that you, your household, and your guests will enjoy. With a few simple steps, you can go from cluttered to tidy in no time.

5 Tips for a Tidy Home

1. Start by Decluttering

The first step on your journey to tidiness is getting rid of clutter lying around your home. Go through each room and evaluate your belongings, asking yourself what is truly necessary among them. If something isn’t a keeper, consider donating, selling, or discarding it. Decluttering creates more spaces and will make cleaning up easier in the long run. Not sure where to start? Focus your initial decluttering efforts on the closets throughout your home and see how much space you can open up for belongings that are currently stored elsewhere.

2. Find Your Cleaning Routine

Making your home tidy is one thing; keeping your home tidy is another. The difference between the two is finding and establishing a cleaning routine that works for you, whether that means doing a few upkeep chores daily or hit “reset” by dedicating a chunk of time to it once a week. Whatever you choose, consistency is key. Include quick tasks like making the bed, wiping down kitchen counters, and doing a load of laundry. Having a routine in place will help you keep up the momentum that’s required to maintain a tidy home.

 

A man is cleaning his kitchen stovetop. He is wearing orange rubber gloves and scrubbing soap over the surface as he works to keep a tidy home.

Image Source: Getty Images – Image Credit: DGLimages

 

3. Prioritize Storage

Everything in your home has to go somewhere. To stay organized, store your items neatly in dedicated bins to maximize your storage efficiency. Keeping items accessible but stored out of sight will give you more room in the open areas of your home and help each room feel tidier. Use containers, shelves, and organizers to keep items like toys, books, and accessories neatly arranged. In the closet, you can maximize space by using hangers, bins, and dividers to keep your wardrobe and accessories in order.

4. Multi-Purpose Cleaning Products

Using multi-purpose cleaning products will simplify your cleaning process and get your home sparkling clean. Having a single cleaner to tackle tough stains and messes around the house can save you money too. Natural cleaning solutions that you can find in the aisles of your grocery store will streamline your cleaning efforts without spraying chemicals throughout the house. Things like lemons, salt, and vinegar will eliminate household odors and can even help to keep bugs and pests at bay. When shopping for cleaning products, look for organic solutions that won’t harm members of your household and your pets.

5. Areas of Focus

Turn your attention to high-traffic areas throughout the house such as the living room and the kitchen. Improvements in your home’s tidiness in these areas will go a long way in contributing to its overall cleanliness. Also, focus on cleaning your appliances. These machines are the workhorses behind a well-functioning home, so giving them some attention will help keep things tidy at home in the long run.

 


­­­­­­Featured Image Source: Getty Images – Image Credit: PeopleImages

Real Estate News & Information September 16, 2025

Local Market Update – September 2025

In the waning days of summer, the local real estate market reflected a mix of shifting prices, easing mortgage rates, and continued annual growth in inventory. Some areas still favored sellers benefiting from demand, while others gave buyers increasing leverage. Together, declining interest rates and higher supply could motivate cautious buyers to re-enter the market this fall.

As of the second week of September, mortgage rates reached their lowest point in 10 months, sitting at 6.35% for a 30-year-fixed-rate loan. Whether this is enough to draw more buyers into action remains to be seen, but it is welcome news for sellers contending with significantly higher inventory and tempered demand amid broader economic uncertainty. How this dynamic plays out in the coming months — particularly as the market enters a seasonal slowdown — will be important to watch.

KING COUNTY
Last month, the median residential sold price in King County rose 4% year over year to $990,000, up from $955,000 in August 2024. The monthly trend was a bit more encouraging for buyers, however, as August’s median sold price dipped 1% from July’s $1,000,000. Active listings were 32% higher than a year ago, expanding options for buyers across the county. In the condo market, prices increased 4% year over year to $549,000, even as supply climbed 29%.

SEATTLE
Seattle’s median single-family home price climbed 8% year over year to $1,000,000, though this marked a 1% dip from July’s $1,010,000. At the same time, inventory rose 17% compared to last August. Condo prices advanced 7% year over year from $555,000 to $595,000, with active listings up 24%. Throughout the summer, Seattle remained one of the more competitive markets in the region, with buyers and sellers adapting to higher prices and rising supply.

EASTSIDE
On the Eastside, the median sold price for a single-family home was $1,537,500 in August, down 1% year over year and 3% from July. Closed sales fell 16% annually, while inventory surged 69%. Motivated sellers had to be flexible to beat out competition last month as nearly 70% of homes sold under list or after a price reduction — a sharp contrast from 2024 when fewer than half did. Meanwhile, the Eastside condo market showed notable strength: median prices jumped 17% year over year to $717,500, with active listings up 48%.

SNOHOMISH COUNTY
Snohomish County saw softer activity in August. Pending sales of single-family homes declined 12% and closed sales dropped 11% compared to last year, while active listings increased 47%. Median sold prices inched up 1% year over year to $790,000 but slipped 2% from July’s $805,000. This month-over-month price dip aligns with the county’s shift toward a balanced market. The median sold price for a Snohomish County condo fell to $500,000, a 15% annual drop and a typical market response to rising inventory — which was 64% higher than a year ago.

As fall begins, our local real estate market is showing signs of equilibrium, with opportunities for both buyers and sellers. Inventory growth and easing rates suggest buyers may gain ground, but how supply responds this season remains an open question. In such a rapidly evolving landscape, expert guidance is essential. Partnering with an experienced Windermere agent can help you build a strategy tailored to today’s conditions and tomorrow’s opportunities.

Click here to read more.

Buyers September 11, 2025

Why AI Can’t Replace Your Real Estate Agent

Technology is transforming nearly every industry, and real estate is no exception. New tools and innovations are reshaping the way we search for, buy, and sell homes. Among these advances, artificial intelligence (AI) has quickly become one of the most talked-about technologies, being used for everything from writing and research to customer service. Naturally, this raises the question of whether it could ever replace jobs that rely on human connection and expertise, like real estate.

In the sections ahead, we’ll break down what AI can and can’t do in real estate, and how agents can use it to their advantage rather than view it as competition.

What is AI?

Artificial intelligence (AI) is technology that allows machines to simulate human intelligence. In recent years, AI has grown at lightning speed and has become part of daily life, often in ways people don’t even notice. Generative AI tools like ChatGPT, Copilot, Gemini, etc., are the ones most people hear about because they can answer questions, draft text, or create images. At the same time, other forms of AI are working quietly behind the scenes on websites, apps, and services we use daily, from recommendation engines to fraud detection.

Together, these tools are changing how we interact with technology, making it faster and more efficient. But when it comes to buying or selling a home, no algorithm can replace the insight, guidance, and personal care of a trusted real estate agent.

How AI is Shaping Real Estate

AI is already influencing how buyers and sellers approach the market. From predictive pricing tools and market analysis platforms to more intelligent home search engines, AI can process large amounts of data and provide insights more quickly than any individual could manage on their own. For agents, it can automate repetitive tasks like drafting emails or creating basic listing descriptions, while chatbots help answer simple client questions around the clock. Some platforms even use AI to match buyers with properties based on preferences or past behaviors. These tools save time and make processes more productive, but they’re only part of the real estate experience.

Why Real Estate Needs a Human Touch

Buying or selling a home is never just about the transaction—it’s often one of the biggest financial and emotional decisions of a person’s life. And while AI may provide quick data or market insights, it can’t sit down with an individual and understand their specific needs, calm their nerves during a stressful moment, or celebrate when the keys are finally handed over.

A real estate agent listens, adapts, and advocates for their clients in ways that no algorithm can replicate, bringing empathy, intuition, and lived experience into the equation rather than just facts and figures. They know the neighborhoods, the schools, and the subtle details that make a house a home. They can recognize when a client needs reassurance, when to negotiate a little harder, and when to suggest a creative solution to keep a deal moving forward. These instincts and skill sets are built on years of human connection, which is what makes the difference between simply completing a deal and guiding someone through a life-changing experience or helping them reach their real estate goals.

The Future: Agents + AI, Not Agents vs. AI

Rather than replacing real estate agents, AI has the potential to make their work even more impactful. Tools like virtual tours, AI-powered staging, and digital imaging can help buyers visualize a property in new ways, while automation can create marketing materials, streamline scheduling, and analyze market trends at an increased speed. These efficiencies free up time and energy for agents to focus on what matters most: listening to clients, building trust, and guiding them through one of life’s most significant decisions.

When used thoughtfully, AI shouldn’t be viewed as a competition, but as a business companion. By blending cutting-edge technology with the irreplaceable human touch, real estate agents can continue to grow their business, deliver better service, and strengthen the personal relationships that remain at the heart of every successful transaction.

At Windermere, our agents use every tool available, but it’s their expertise and personal care that truly set them apart. Connect with an experienced Windermere agent today:

Design September 9, 2025

5 Features of Traditional Interior Design

There is perhaps no other home décor style as comforting as traditional interior design. Rooted in the masterfully crafted Chippendale and Thomas Sheraton furniture designs and classic Queen Anne colors, traditional décor is one vintage style that stood the test of time. Here are five distinct features of traditional interior design.

5 Features of Traditional Interior Design

1. Dark Wood Finishes

Part of the reason for traditional design’s timeless appeal is its use of woodworking. With woodwork as a foundation, this design style feels classic but not dated. The dark, bold colors resemble the Victorian style, but traditional interiors are simpler and less ornate. The dark tones of the wood create a foundation for a more colorful decorative palette.

 

An example of traditional interior design: a classic living room with dark wood built in shelves, metal light fixtures, decorative candle holders, and a patterned carpet over hardwood flooring.

Traditional interior design living room with dark wood finishes | Image Source: Getty Images – Image Credit: IPGGutenbergUKLtd

 

2. Traditional Design Color Palette

Traditional design can handle a heavier color palette while still providing comfort. The darker wood tones allow for darker color to be used elsewhere throughout a space, such as dark window coverings. Floral, plain colors, and muted plaids are all common color schemes. Walls are often covered with patterned wallpaper, floral designs, or damask. In terms of designs, traditional interiors pair well with geometrics and small, striking yet understated patterns.

3. Hardwood Flooring

This design style is classic from the floor to the ceiling. You won’t find laminate or tile flooring in the common areas of a home that adheres to the principles of traditional interior design. Complimenting the surrounding woodwork, homes designed in this style have solid hardwood flooring. How to Choose the Best Flooring

 

An example of traditional interior design: a classic living room with dark wood features, traditional furnishings, wood cabinets with glass windows, and a patterned carpet over hardwood flooring.

Traditional interior design living room with hardwood flooring | Image Source: Getty Images – Image Credit: mikolajn

 

4. Traditional Decorations

The decorations used in traditional design help to reinforce its unique, classic-yet-comfortable ambiance. Table lamps and vases are typical of a traditional interior, often displayed in pairs to create symmetry. Though these accessories are bold, they are never too ornate or over-the-top enough to dominate the room.

5. Design Philosophy

Traditional design is calm and orderly. Whereas a more eclectic interior design style may offer more surprises throughout its spaces, a traditional interior is more predictable. Even the textiles used are subtle, with typical materials ranging from cotton and fur to velvet and silk.

For more inspiration and interior design tips, visit the Design category of our blog:

Windermere Blog | Design

 


­­­­­­Featured Image Source: Getty Images – Image Credit: irina88w  

Design September 4, 2025

How to Bring Coastal Charm into Your Home No Matter Where You Are

Coastal interior design captures the calm elegance of life by the water. It’s bright, breezy, and effortlessly connected to nature, drawing inspiration from the textures and warmth of the shore, the shifting blues of the sea, and the weathered charm of driftwood and dune grass. This style invites the outdoors in, creating spaces that feel open, welcoming, and dreamy, no matter how far you are from the coastline.

Defining Features of Coastal Interior Design

Natural Materials

Coastal design embraces organic textures that feel relaxed and lasting, mirroring the landscape along the shoreline. Wicker and rattan furniture bring a light, casual elegance, while woven jute or sisal rugs add earthy texture underfoot. Weathered or reclaimed wood, whether used in furniture, ceiling beams, or accent walls, offers a sun-worn character that feels authentic to seaside living. Glass elements, including vases, oversized mirrors, and light fixtures, reflect light and mimic the clarity of water, while stone or pebble accents can subtly reference the beach and coastline. Even fabrics play a role, typically with cotton, linen, and other breathable, natural fibers, keeping the look feeling fluid and inviting.

A Coastal Color Palette

The colors of the coast bring this style to life. Crisp whites and soft creams create a fresh, open backdrop, while sandy beiges and sun-bleached wood tones add warmth and a lived-in ease. Layered into this foundation are sea-inspired blues in every shade, from the pale, airy blue of a summer sky to the rich, grounding depth of navy. Small pops of teal, aqua, seafoam green, and even coral can bring a burst of energy, infusing the space with the vibrant, refreshing spirit of life by the water.

Light, Airy Spaces

Abundant natural light is central to coastal interiors. Large windows, double-glass French doors, and open layouts blur the lines between inside and out. Sheer linen drapes catch the breeze, while white or pale walls reflect light to make rooms feel even more expansive. One of the advantages of using natural materials in coastal design is that they age gracefully, gaining character over time while preserving the fresh, airy feel that helps define this style.

Subtle Nautical Touches

Coastal design often incorporates gentle, well-chosen nods to the sea. Rope accents woven into mirrors or light fixtures, bowls of collected shells, or artwork featuring surfboards, sailboats, and marine life can all bring a hint of nautical charm. Avoid an overly beachy look by balancing nautical accents with clean lines and neutral tones. These elements should evoke the feeling of the coast rather than recreate it literally, keeping the space elegant, storied, and timeless.

Built-In Charm

Architectural details like white-washed built-in shelving, wood-clad ceilings, or wall paneling give coastal homes a sense of craftsmanship and permanence. These features provide the perfect stage for displaying curated coastal finds like sea glass, ceramics, or woven baskets.

Bringing the Look into Your Home

You don’t need an ocean view to enjoy the beauty of coastal design. Start with a light, neutral foundation and layer in soft blues, sandy tones, and natural textures. Choose furniture that feels comfortable and unfussy, and incorporate elements that remind you of the shore, whether that’s a woven jute rug in the bedroom, a driftwood coffee table, or a few well-placed nautical pieces.

Candles or diffusers with fresh, sea-inspired scents can enhance the atmosphere, creating the sensory experience of a salty ocean breeze. And if you’re looking for real-life inspiration, a visit to Seabrook, WA, can spark ideas with its homes and community spaces being a masterclass in blending classic coastal styles with modern living.

For more design inspiration, tips, and trends, visit the design section of our blog.

These Seabrook listings showcase how coastal style blends comfort, light, and seaside charm.

Real Estate News & Information September 2, 2025

What The Ballooning National Debt Means For Housing

For Americans already struggling with the highest mortgage rates in a generation, new legislation out of Washington promises little relief. The “One Big Beautiful Bill Act” (OBBBA) will add trillions to the national debt over the next decades, further cementing an era of expensive borrowing.

The basic laws of supply and demand suggest this surge in government debt issuance will push interest rates even higher for everyone, straining the already-frozen housing market and increasing costs for all types of credit.

The one silver lining, though, is that the sooner lenders accept our “higher for longer” new world of interest rates, the sooner they can stop worrying so much about prepayment risk, which may shrink the spread they charge above 10-year Treasury yields. Below, we’ll explore how national debt impacts real estate.

As Uncle Sam borrows ever more, everyone’s interest rates will rise

The One Big Beautiful Bill Act, enacted this summer, puts the pedal to the metal for debt accumulation over the next decade in the U.S. The Committee for a Responsible Federal Budget estimates that it will add a cumulative $5.5 trillion to the debt by 2034, under the realistic assumption that its provisions written to expire will instead be extended, as has become normal in federal budgeting.

Even taking the expirations at face value, though, the bill raises deficits by a cumulative $4.1 trillion, an extraordinary choice in the midst of an economic expansion and coming on the heels of the worst bout of inflation in decades.

The issuance of trillions of dollars of additional debt in the next several years is expected to drive up interest rates. The Budget Lab at Yale has estimated that the bill will raise 10-year Treasury yields by about half a point in the next several years and by more than 1.4 points in the very long run.

This is driven in part by their modeling assumption that the Federal Reserve will succeed at keeping inflation close to 2 percent, which will require higher interest rates in the long run. They also expect a higher term premium on long-term debt, like 10-year Treasuries.

Altogether, this paints a picture of government borrowing crowding out private borrowing — as the Treasury issues more debt to finance its deficits, yields must rise to compensate investors. Other debt in the economy, such as mortgages, must yield more as well, in order to compete with Treasury bonds for lenders.

High interest rates have already frozen the housing market

While the U.S. economy continues to grow, the U.S. housing market has been stuck in neutral for over three years. Ever since mortgage interest rates rebounded from all-time lows below 3 percent for 30-year loans in 2020 and 2021, to generational highs above 7 percent in 2023, existing-home sales have been stuck in the neighborhood of 4 million annual sales.

It’s no surprise that fewer homes are changing hands than during the 2021 low-interest-rate boom, but 4 million is much fewer than even prevailed during the 2010s. In fact, 2024’s total of 4.06 million existing-home sales was the lowest total since the 1990s. The housing market is caught in a perfect storm, keeping homeowners frozen in place, thanks to the one-two punch of high price-to-income ratios and high mortgage rates.

While the OBBBA includes some sweeteners for certain homeowners, like the expansion of the state and local tax deduction cap to $40,000, the main long-term effect it promises for housing is just higher interest rates.

One near-term trend likely to help mortgage borrowers: a thinner spread

Bigger deficits, bigger debt, higher interest rates — the long-term fiscal outlook is getting darker. But there’s one silver lining that has begun to shine around the edge of these gathering clouds. The mortgage-Treasuries spread has begun to narrow again, resuming its progress back down toward pre-pandemic levels. The spread, here, refers to how much higher 30-year mortgage rates are averaging than 10-year Treasury yields.

In the 21st century, up to the pandemic, mortgage rates rarely exceeded 10-year Treasury yields by more than 2 percentage points, except during the global financial crisis. When mortgage rates soared back up in 2022, part of their climb was due to the widening spread. The two major reasons for widening spreads are a greater prepayment or refi risk on mortgages and interest rate volatility.

The latter has gradually faded this summer after spiking amidst tariff uncertainty in April. But the prepayment risk component is the bigger factor. For lenders and the investors who buy mortgage-backed securities, mortgages issued at high interest rates are uniquely risky because borrowers are expected to refinance them once mortgage rates fall back down.

The lack of a prepayment penalty for borrowers makes U.S. mortgages uniquely favorable to homebuyers here. If rates rise, they win by virtue of having locked in a lower rate; if rates fall, they can always refinance. Investors and lenders, by the same token, view refinancing as a unique downside to holding mortgages. They want a reliable coupon stream from mortgage holders’ monthly payments.

Seeing their loans wiped out by refinancing, replaced by cash in a new lower-interest-rate world, is a risk for which they must be compensated to make the loan in the first place.

That extra compensation for prepayment risk helped explain why mortgage rates soared even more than 10-year Treasury yields in 2022 and 2023. Now, though, as the reality sets in that we are living in a world where interest rates are “higher for longer,” lenders have gradually brought mortgage rates down relative to Treasuries, from about a 2.9-point spread in 2023 to 2.4 in recent months, or about one-third of the way back to normal.

The sooner investors conclude that refinancing prepayment risks aren’t so high, the sooner the spread can come down. The potential bankshot silver lining of the OBBBA? By putting a nail in the coffin of hopes for low interest rates, it may help further shrink the spread, so that higher 10-year Treasury yields don’t have to mean higher mortgage rates one-for-one.

Ultimately, the nation’s fiscal path points toward a new normal of higher borrowing costs for all. The “One Big Beautiful Bill Act” serves as an accelerant, solidifying a “higher for longer” interest rate environment that will impact everything from car loans to corporate debt. For the beleaguered housing market, this presents a bittersweet trade-off.

The bad news is that the foundational interest rate, the 10-year Treasury yield, is set to climb. The paradoxical good news is that by killing the hope of a return to ultra-low rates, the OBBBA may continue to shrink the risk premium lenders charge on mortgages. This narrowing spread won’t turn 7 percent mortgages back into 3 percent loans, but it might help us work our way back down closer to 6 percent.

Jeff Tucker is the Principal Economist at Windermere Real Estate in Seattle, WA. This blog was originally published on Inman News on 8/26/25.