  Compact Galactic binaries where at least one member is a white dwarf or
neutron star constitute the majority of individually detectable sources for
future low-frequency space-based gravitational-wave (GW) observatories; they
also form an unresolved continuum, the dominant Galactic foreground at
frequencies below a few mHz. Due to the paucity of electromagnetic
observations, the majority of studies of Galactic-binary populations so far
have been based on population-synthesis simulations. However, recent surveys
have reported several new detections of white-dwarf binaries, providing new
constraints for population estimates. In this article, we evaluate the impact
of revised local densities of interacting white-dwarf binaries on future GW
observations. Specifically: we consider five scenarios that explain these
densities with different assumptions on the formation of interacting systems;
we simulate corresponding populations of detached and interacting white-dwarf
binaries; we estimate the number of individually detectable GW sources and the
magnitude of the confusion-noise foreground, as observed by space-based
detectors with 5- and 1-Mkm arms. We confirm earlier estimates of thousands of
detached-binary detections, but project only few ten to few hundred detections
of interacting systems. This reduction is partly due to our assessment of
detection prospects, based on the iterative identification and subtraction of
bright sources with respect to both instrument and confusion noise. We also
confirm earlier estimates for the confusion-noise foreground, except in one
scenario that explains smaller local densities of interacting systems with
smaller numbers of progenitor detached systems.
