What Is Steering in Real Estate?

7 Min Read
Published May 8, 2023
Real estate agent shows a home to a mixed-race couple.
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Steering occurs when prospective homebuyers are guided toward or away from particular neighborhoods based on their race, ethnicity, or other protected characteristics, limiting their homebuying options.

Steering is one way that discrimination persists in the housing market despite laws designed to prevent it.

Because steering can manifest in subtle ways, it can be difficult to detect and prevent. Here’s a closer look at what steering is, how it affects communities, and how to spot and prevent it.

Understanding Steering

Steering occurs when a real estate agent guides a homebuyer toward or away from certain neighborhoods based on the buyer’s race, skin color, national origin, religion, sex, gender identity, sexual orientation, familial status, or disability. The result is that such homebuyers are only given housing options in certain neighborhoods, while other homebuyers are given a more complete and diverse set of options.

“Steering refers to the practice of influencing a potential homebuyer to purchase or rent a property in a specific area or neighborhood for reasons related to race, national origin, or any other protected class,” says Scott Rubzin, founder of Tiffany Property Investments in Charlotte, North Carolina. “Steering can be done in a variety of ways, such as through subtle suggestions, showing a limited selection of properties, providing information about certain neighborhoods, or omitting certain neighborhoods from consideration altogether.”

Steering has been a pervasive problem in the real estate market for years, and persists today despite being prohibited by law.

“The Fair Housing Act of 1968 made steering based on race, color, religion, national origin, sex, familial status, or disability illegal,” Rubzin says. “Some states have enacted laws that make steering based on other protected classes — such as sexual orientation or gender identity — illegal as well.”

Steering can manifest in subtle ways, which sometimes makes it tricky to detect.

Examples of Steering in Real Estate

There are different ways that steering can occur during the homebuying process. Examples of steering based on race include:

  • Agents only showing Black clients homes in predominantly Black neighborhoods.
  • White homebuyers having access to more home listings than nonwhite homebuyers.
  • White homebuyers being discouraged from looking in nonwhite neighborhoods because they are “less safe.”
  • Informing white homebuyers of security concerns that are not disclosed to nonwhite buyers.
  • Depicting nonwhite neighborhoods as having inferior schools.
  • Discouraging white homebuyers from purchasing homes in diverse neighborhoods.
  • Using coded language to disparage nonwhite neighborhoods.

Other types of discrimination in real estate

In addition to steering, there are other types of housing discrimination in the real estate market. Here are examples:

  • Blockbusting. A real estate agent convinces white homeowners that property values in their area are declining because more homebuyers from various racial and ethnic backgrounds are moving into the neighborhood. The agent typically is hoping to cash in on a pattern known as white flight, where white homeowners sell their homes for less to move out of the area quickly and avoid a further decline in home prices. Agents and developers aim to buy those homes at a discount and then sell them to minority homebuyers at full price to increase their profits.
  • Redlining. The practice of redlining dates back to the Great Depression, when the government began offering federally insured mortgages. “Residential safety maps” were created to evaluate the risk of issuing loans to buy homes in each area. Predominantly minority neighborhoods were marked on those maps in red, which indicated they were a poor risk for lending. That made it difficult, if not impossible, for borrowers to get a good interest rate on a mortgage or even get approved for a home loan to buy those properties.

Consequences of Steering

While steering in practice can be subtle and difficult to detect, its long-term consequences are well documented. Here’s a look at some of the negative consequences of steering in real estate.

Effect on minority communities

Steering hurts minority communities on several levels.

Segregation and quality of schools

Even though it’s been decades since schools were desegregated and the Fair Housing Act of 1968 passed, communities across the country still experience de facto segregation. Research suggests that the United States remains almost as segregated as it did when the Fair Housing Act was passed.

According to a 2017 report from the National Fair Housing Alliance, the average white person lives in a neighborhood that is at least 80% white. Meanwhile, about half of all Black people and 40% of Latinos live in neighborhoods without any white people.

The segregation of communities based on race affects the quality of public schools. According to the nonprofit education advocacy group EdBuild, nonwhite school districts receive $23 billion less in funding than white school districts with the same number of students.

Lack of upward mobility

Steering also has a long-term effect on minority families’ finances. In segregated areas, families are less upwardly mobile. According to the National Bureau of Economic Research, steering nonwhite families toward poorer areas could contribute to the intergenerational income mobility gap.

Effect on home values

Recent research indicates that homes are appraised at lower values in communities of color — especially Black neighborhoods — compared to very similar homes in white neighborhoods. As a result, Black homeowners are less able to build wealth through home equity.

Effect on ownership rates

Redlining made it more difficult for minority homebuyers to afford a mortgage when compared with white homebuyers in a similar financial situation. Those minority homebuyers were unable to build equity as quickly, which gave them less to pass along to the next generation. On top of that, the lower appraisal values in Black neighborhoods further discouraged homeownership.


Another harmful effect of steering is that nonwhite homebuyers tend to get guided toward neighborhoods with more pollution. Research from Ohio State University found that disease-causing air pollution is especially prevalent in Black neighborhoods.

How Common Is Steering?

Newsday investigated how widespread steering is in the Long Island real estate market in New York. The newspaper report found that real estate agents guided white homebuyers to different areas than nonwhite homebuyers 24% of the time. The same report found evidence of unequal treatment by real estate agents:

  • 19% of the time against Asian homebuyers.
  • 39% of the time against Hispanic homebuyers.
  • 49% of the time against Black homebuyers.

How To Spot Steering

Here are some warning signs that may indicate you’re experiencing steering:

  • Your agent is only showing you listings in neighborhoods that predominantly match your race.
  • Your agent is showing you limited options.
  • Your agent appears to make assumptions about your preferences based on your race.
  • Your agent has made negative remarks about certain neighborhoods based on race, religion, or other protected characteristics.
  • Your agent refuses to show you certain neighborhoods.

How To Respond To Steering

The Fair Housing Act is enforced by the Department of Housing and Urban Development’s Office of Fair Housing and Equal Opportunity. If you believe you’re the victim of steering, you can file a complaint online.

“If you suspect that you are being steered, the first thing you should do is report it,” says Humberto Marquez, a real estate broker at Awning in Houston. “You can file a complaint with the Department of Housing and Urban Development or contact a local fair housing agency. Additionally, it’s important to seek legal help to protect your rights and interests in the matter.”


Here are answers to some common questions about steering.


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