What is an effect of steering on housing markets?

Steering refers to the practice where real estate agents or sellers guide potential homebuyers towards certain neighborhoods based on their race, ethnicity, or other characteristics. This practice can significantly restrict the choices available to buyers by directing them towards specific areas and away from others. As a result, individuals may not be given the opportunity to explore a full range of housing options that they would have otherwise considered.

This restriction can contribute to the reinforcement of segregated communities and limit the diversity within neighborhoods. Buyers might end up living only in areas that are deemed appropriate or desirable for their particular demographic, which can have long-term effects on community cohesion and individual opportunities. Therefore, the effect of steering directly impacts the housing market by fundamentally limiting buyer choices and undermining the principles of fair housing.