What Is Steering in Real Estate?

Steering in real estate is the illegal practice of influencing or directing buyers or renters toward or away from certain neighborhoods or properties based on protected characteristics such as race, religion, or family status. It is prohibited by the federal Fair Housing Act and many state laws because it restricts housing choice, perpetuates segregation, and denies equal access to opportunity. In practice, steering can be subtle—shaped by comments about “good schools,” safety, or “where you’ll feel comfortable,” selective showings, mapping boundaries, or even algorithmic filters that narrow listings.

How Steering Works

Steering occurs when a housing professional’s words, actions, or systems channel a client’s options based on protected traits rather than the client’s stated, objective criteria. It can look like an agent only showing homes in areas where people of a similar background live, discouraging interest in certain neighborhoods, or using coded language about schools and crime. In the digital era, steering can also happen via online platforms or recommendation algorithms that personalize listings in ways that correlate with protected characteristics, even without explicit intent.

The Law and Protected Classes

At the federal level, the Fair Housing Act (1968) forbids steering and other forms of housing discrimination. State and local laws often add additional protections. The U.S. Department of Housing and Urban Development (HUD) and the Department of Justice (DOJ) enforce these rules, and many states’ real estate commissions and professional organizations (such as the National Association of Realtors’ Code of Ethics) also prohibit steering.

The following are the federally protected classes that cannot be used—directly or indirectly—to influence where someone is shown or steered in housing:

• Race
• Color
• National origin
• Religion
• Sex (including sexual orientation and gender identity)
• Familial status (presence of children, pregnancy, custody)
• Disability

Many jurisdictions layer on additional protected traits such as source of income (including housing vouchers), age, marital status, or military status. Regardless of the jurisdiction, steering remains illegal whether or not it’s explicit, intentional, or produced by software.

Examples and Red Flags

Steering often hides in ordinary-seeming interactions. The following patterns are frequently cited by investigators, advocates, and regulators as warning signs of steering:

• Showing different neighborhoods or a narrower set of listings to clients with similar budgets and preferences based only on their perceived background.
• Discouraging or downplaying certain areas with phrases like “you wouldn’t be comfortable there” or “that school isn’t a fit,” without objective, client-selected criteria.
• Refusing to provide a full set of available listings or maps, or drawing search boundaries that track racial or ethnic lines.
• Using school ratings, crime maps, or “safety” commentary as a proxy for who lives there, rather than providing neutral, third-party sources for the client to review.
• Online or app-based personalization that hides or de-prioritizes listings for users correlated with protected characteristics.

If you encounter these patterns, consider documenting what happened and seeking advice. Even subtle differences in treatment—revealed through “paired testing” where similar clients receive different options—can constitute unlawful steering.

Impact and Why It Persists

Steering limits choice, concentrates families by race or income, and reinforces gaps in access to high-quality schools, jobs, transportation, health care, and wealth-building. Investigations over the past decade, including large-scale paired testing by journalists and fair housing groups, have shown steering remains a systemic risk. The growth of digital search and recommendation tools introduces additional concerns: personalization can inadvertently replicate historical patterns unless carefully audited for fairness.

What Consumers Can Do

Prospective buyers and renters can take practical steps to protect their choices and assert their rights if they suspect steering:

1. Ask for comprehensive options: request full MLS or platform search results that match your objective criteria (price, size, commute, amenities).
2. Set the criteria: define your needs in writing and ask your agent to filter only by those neutral factors.
3. Request sources, not opinions: for schools, crime, or environmental questions, ask for links to official or independent datasets rather than subjective commentary.
4. Document interactions: keep emails, texts, property lists, and notes of conversations; this record helps if you file a complaint.
5. Compare treatment: if possible, bring a companion to a showing or consult a fair housing group that conducts paired testing.
6. Report concerns: you can file a fair housing complaint with HUD (generally within one year) or consult an attorney to consider a civil action (often within two years, timelines vary). Local fair housing organizations can guide you through options.

These steps help ensure you see the full market and create a factual record if you need to assert your rights.

What Agents, Brokers, and Platforms Should Do

Industry professionals can reduce legal risk and improve equity by operationalizing fair housing compliance throughout their workflow and technology:

• Use standardized intake scripts and checklists that capture only objective, client-driven criteria.
• Provide neutral, third-party data links (e.g., state education departments, transit agencies) rather than characterizing neighborhoods.
• Avoid discussing protected characteristics or proxies (e.g., “good schools,” “safe,” “you’d fit in here”); let clients interpret data.
• Show full, criteria-matching inventory and document why any property was excluded.
• Train regularly on fair housing, implicit bias, and local law updates; role-play compliant responses to sensitive questions.
• Audit marketing and lead-routing: ensure ads and referrals do not target or exclude based on protected traits or look-alike proxies.
• Govern algorithms: test recommendation, ranking, and filtering models for disparate impact; maintain explainability, overrides, and complaint channels.
• Maintain compliance logs: retain search parameters, listing sets shown, and rationales for decisions.

Embedding these safeguards helps professionals serve clients consistently and demonstrate compliance if questions arise.

Penalties and Enforcement

Steering can trigger serious consequences under federal, state, and professional rules:

• HUD investigations and administrative proceedings, with civil penalties and orders to change practices.
• DOJ lawsuits seeking damages, civil penalties, and injunctive relief.
• Private civil actions that can result in compensatory and, in some cases, punitive damages, plus attorneys’ fees.
• State licensing discipline, including fines, suspension, or revocation.
• Professional sanctions under industry codes of ethics.

Timelines and remedies vary by jurisdiction; consulting counsel or a fair housing agency promptly preserves options.

Key Distinctions

Steering vs. Redlining

Redlining is typically a lender or insurer’s systematic denial or restriction of services based on neighborhood demographics. Steering is an agent’s or platform’s direction of individual clients to or from areas based on protected traits. Both are illegal and mutually reinforcing but occur at different points in the housing process.

Steering vs. Advising on Neighborhood Fit

Advising is lawful when it relies on client-selected, objective criteria and neutral data. Steering occurs when the professional substitutes their own preferences—or those tied to protected characteristics—for the client’s criteria. A compliant approach is to offer verified sources and let clients draw their own conclusions.

Current Outlook

Regulators have increased scrutiny of differential treatment in both traditional brokerage and digital housing platforms, emphasizing that fair housing rules apply to algorithmic systems. Many states now require enhanced fair housing training for licensees, and local laws continue to expand protected classes such as source of income. The trend is clear: steering—whether overt, subtle, or automated—remains unlawful regardless of intent, and documentation, auditing, and transparency are becoming industry norms.

Summary

Steering in real estate is the unlawful channeling of buyers or renters to or from homes or neighborhoods based on protected characteristics. It can be verbal, behavioral, or algorithmic, and it harms choice and equity. Consumers should define objective criteria, request full options, rely on neutral data, and document interactions. Professionals should standardize processes, avoid proxies, audit listings and algorithms, and maintain clear records. Enforcement by HUD, DOJ, states, and professional bodies carries meaningful penalties, making proactive compliance essential.

Why is steering illegal in housing?

Under the Fair Housing Act, steering is illegal. This Act protects individuals from discrimination in the sale, rental, and financing of dwellings based on race, color, religion, sex, familial status, national origin, or disability.

What does steering mean in real estate?

Steering is a method of discrimination in real estate. It happens when a real estate licensee influences a buyer or prospective tenant’s choice of housing because of their color, race, national origin, religion, gender, disability, or familial status.

What is the difference between blockbusting and steering?

There are various controversial acts related to real estate practices that often infringe upon rights and quickly become illegal. Explore the practices of redlining (discrimination), blockbusting (pressuring to sell cheap), and steering (pushing for race-specific neighborhoods).

What is an example of steering?

An example of steering is a real estate agent who only shows properties to a Black family in a predominantly Black neighborhood, while showing a white family similar properties in a predominantly white area, thus limiting the Black family’s housing options based on race. Steering involves guiding or directing homebuyers or renters toward or away from specific areas based on protected characteristics like race, religion, gender, or national origin, which is illegal discrimination under the Fair Housing Act. 
Examples of illegal steering in real estate:

• An agent discourages a prospective buyer from considering a particular neighborhood because the agent “assumes” the buyer, based on their race, will not be comfortable there. 
• An agent shows a Latin family homes only in a neighborhood with a high concentration of other Latin residents, even if the family expresses interest in other areas. 
• A real estate agent only shows properties to an individual with young children in neighborhoods known for having more families, even though the client may prefer other types of neighborhoods. 
• A landlord suggests a tenant of one religion might “fit in better” by living in an apartment complex with a large population of people of the same religion. 

Why steering is harmful:

• Limits Housing Options: It restricts the choices available to buyers and renters, preventing them from finding homes that meet their needs or preferences. 
• Perpetuates Segregation: Steering can contribute to the formation of segregated neighborhoods and limit opportunities for diverse communities. 
• Unethical and Illegal: It is a form of illegal discrimination and a violation of fair housing laws designed to ensure equal access to housing for everyone.