When I first started learning about real estate ethics, one term that stood out to me was steering. It sounded harmless at first—until I realized how deeply it affects people’s lives, choices, and even the shape of communities. Steering isn’t just poor business practice; it’s a form of discrimination that continues to shape housing inequality across the country.
So, what is steering in real estate, and why is it such a critical issue for agents, buyers, and communities alike? Let’s break it down clearly and fairly.
What Is Steering in Real Estate?
Steering in real estate is the unlawful practice of guiding or discouraging homebuyers from certain neighborhoods based on protected characteristics such as race, color, religion, gender, national origin, disability, or familial status.
Under the Fair Housing Act, steering is a form of housing discrimination because it restricts buyers’ freedom to choose where they want to live and can lead to segregation or unequal access to community resources.
How Does Steering Work?
Steering can be either explicit or subtle, and that’s what makes it particularly insidious. Real estate agents might not even realize they’re engaging in steering if they allow assumptions or stereotypes to influence their recommendations.
Here are some common examples of how steering happens in practice:
1. Guiding Toward or Away From Neighborhoods
An agent might show homes in one area but avoid others because they believe a client “would fit in better” somewhere else. This seemingly helpful advice is discriminatory when based on protected traits like race or religion.
2. Providing Biased Information
Sometimes the bias comes in the form of coded language—like suggesting an area is “family-friendly,” “up-and-coming,” or “not your type of neighborhood.” These phrases can subtly communicate assumptions about the racial, cultural, or socioeconomic makeup of an area.
3. Withholding or Omitting Listings
Another method involves not showing certain properties that meet a client’s needs simply because of their identity or background. This deprives clients of fair access to available housing.
4. Acting on Stereotypes or Personal Bias
When agents assume a buyer’s preferences based on their ethnicity, religion, or family status, they’re engaging in steering—even if their intent isn’t malicious.
5. Steering for Financial Gain
While less discussed, steering can also occur for non-protected reasons, such as an agent guiding clients toward homes with higher commission rates. While not illegal discrimination under the Fair Housing Act, this is still unethical and violates professional standards.
Why Is Steering Illegal?
The Fair Housing Act of 1968 made steering illegal because it leads to discriminatory housing outcomes and reinforces segregation. Here’s what’s at stake:
- Limits housing choices: Buyers lose the opportunity to make decisions based on their own needs and preferences.
- Perpetuates inequality: Steering maintains divided communities, often along racial or economic lines.
- Undermines trust: It damages the credibility of the real estate profession by introducing bias into what should be a neutral, client-driven process.
The U.S. Department of Housing and Urban Development (HUD) and the Department of Justice (DOJ) actively investigate steering cases, often using “paired testing,” where two testers—identical except for race or another protected trait—request information to see if they’re treated differently.
Real-World Impacts of Steering
The effects of steering ripple far beyond a single transaction. When agents influence buyers based on bias, it can lead to segregated neighborhoods, uneven school quality, and disparities in property value growth. Over time, these patterns widen the racial wealth gap and limit opportunities for families in marginalized communities.
Steering doesn’t just harm the buyer—it harms society by reinforcing invisible barriers in housing and education.
How to Identify and Prevent Steering
For Real Estate Professionals
- Show all qualifying listings: Always present every property that fits the buyer’s stated needs, regardless of location or demographics.
- Avoid assumptions: Never base recommendations on what you think a client might prefer because of their background.
- Stick to data: If a client asks about crime rates or schools, direct them to verified third-party sources rather than offering personal opinions.
- Train regularly: Ongoing fair housing training helps agents recognize unconscious bias and remain compliant with federal law.
For Homebuyers
- Be aware: If an agent avoids showing homes in certain areas or discourages you from exploring them, that’s a red flag.
- Ask direct questions: Request listings in multiple neighborhoods to see if you’re being given full options.
- Report violations: You can file a complaint with HUD if you suspect steering or any form of discrimination.
Quick Comparison: Legal Guidance vs. Illegal Steering
| Practice | Description | Legal Status |
| Recommending areas based on price range, commute time, or amenities | Helping clients match objective needs | Legal |
| Avoiding neighborhoods because of the racial or religious makeup | Influencing based on protected characteristics | Illegal |
| Sharing school district data from official public sources | Providing factual, publicly available information | Legal |
| Making personal comments about “good” or “bad” neighborhoods | Expressing bias that can steer buyers | Illegal |
| Showing all listings that fit a buyer’s preferences | Ensuring fair access | Legal |
| Withholding listings in certain areas | Limiting housing choices based on bias | Illegal |
Steering vs. Fair Market Guidance
Not every recommendation counts as steering. There’s a difference between offering professional guidance and influencing based on bias. The key is intent and basis.
If an agent suggests a neighborhood because it’s within a client’s budget, near their workplace, or offers the features they requested, that’s fair guidance. But if the suggestion is based on assumptions tied to race, religion, or family size, that’s steering.
Legal Framework and Enforcement
The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) explicitly prohibits discrimination in housing-related transactions. HUD investigates complaints, and violators can face fines, license suspension, or legal action.
In addition, state laws and local fair housing commissions often provide further protections, making compliance essential for real estate professionals.
What Can Buyers and Agents Do Moving Forward?
Creating equitable housing access starts with awareness and education.
- Agents must commit to fair representation and transparent practices.
- Buyers should feel empowered to choose freely without being influenced by bias.
- Brokerages should integrate anti-bias training and enforce zero-tolerance policies for discriminatory conduct.
By eliminating steering, the real estate industry can help build diverse, inclusive communities where choice—not prejudice—determines where people live.
Also Read: how to become a real estate agent
FAQs About Steering in Real Estate
1. What is steering in real estate in simple terms?
Steering happens when an agent guides a buyer toward or away from certain neighborhoods based on personal characteristics like race or religion, instead of the buyer’s preferences or qualifications.
2. Is steering illegal in all states?
Yes. Steering violates the federal Fair Housing Act, which applies nationwide. Many states also have their own fair housing laws with additional penalties.
3. How can I report steering?
You can file a complaint with the U.S. Department of Housing and Urban Development (HUD) or your state’s fair housing agency. They investigate such claims and can take enforcement actions.
4. What’s the difference between steering and offering professional advice?
Professional advice focuses on factual criteria like price or commute time. Steering involves bias—directing buyers based on protected traits rather than objective needs.
5. Can unintentional steering still be illegal?
Yes. Even if an agent doesn’t intend harm, their actions may still violate fair housing laws if they limit a client’s housing options due to bias or assumptions.
Building Trust Through Fair Housing Practices
Understanding what steering in real estate means is more than just compliance—it’s about ensuring that every buyer has equal access to opportunity. As professionals, agents hold the power to shape neighborhoods, and with that comes responsibility.
When buyers are shown every option available, regardless of who they are or where they come from, real estate becomes what it’s meant to be—a fair and open pathway to homeownership for all.
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