Homeownership — made ever more attractive this past year because of the rise of remote work and record-low mortgage rates — has long been regarded as the fastest path to wealth and the ultimate representation of the American dream.
It is, however, more difficult for some Americans to pursue that dream than it is for others.
In the 20th century, discriminatory practices like redlining helped the white middle class build home equity while most others missed out, as Andre Perry, a senior fellow at the Brookings Metropolitan Policy Program, told the US House of Representatives in February testimony about racial disparities in homeownership.
Today, "the most insidious forms of discrimination that were once supported by federal policy are now illegal," he said. But the long-lasting effects of those policies are still apparent, and discrimination is still something many house hunters have to grapple with.
As a house hunter, it is your right to find a property without fear of discrimination based on race, religion, sex, familial status, and more. But Perry said personal biases of "individual appraisers, realtors, and lenders" could still affect your search.
It is "particularly hard to tell" whether you've been discriminated against when it comes to housing, the civil-rights attorney Alanna Kaufman said. It can be as discreet as a realtor describing one neighborhood as more of a cultural fit for you over another.
Trust your gut: If you feel something is off during your house hunt, it very well might be. The best advice in confronting housing discrimination is to "pay attention, ask questions, take notes, investigate, and seek legal counsel," Kaufman told Investopedia.
If you suspect you're being discriminated against for any reason, you can file a complaint with the US Department of Housing and Urban Development's Fair Housing and Equal Opportunity Office and reach out to a local fair-housing center to take legal action.
Housing discrimination can take numerous forms, including harassment and intimidation. Here are the two most prevalent — and sometimes more covert — forms of discrimination to watch out for:
Realtors using coded language
"If you feel a person is trying to direct you to certain neighborhoods with certain races or religions, that could often be a flag," Kaufman said. The Department of Housing and Urban Development refers to this kind of realtor activity as "steering."
For instance, you could meet with a real-estate agent to discuss house hunting and list a few neighborhoods of interest. That realtor may then try to show you homes in different neighborhoods under the guise of you "feeling more comfortable." While visiting those suggested homes, you may notice the neighbors share your ethnicity or religion.
Seemingly harmless statements like "This house and neighborhood don't seem like the right fit for your family" or "Don't you want to live somewhere where more people speak Spanish, like you?" are also forms of steering. The Fair Housing Center of Southeast & Mid Michigan even tells community members that housing discrimination like this often comes with "a smile and a handshake."
Recognizing those behaviors can help you combat discrimination, Kaufman said.
Mortgage lenders and home sellers immediately waving you off
Discrimination stemming from realtor biases is not the only kind to look out for. Receiving an immediate denial from a mortgage lender could also be cause for concern.
On its website, HUD provides the example of a couple being denied a mortgage because one partner is pregnant. In the example, the loan officer asks the couple whether the pregnant woman will take maternity leave. When she says yes, the loan officer denies the loan and says, "I've seen too many women change their mind about going back to work." The situation would be considered discrimination based on sex and familial status. It also extends to ultimately being offered a loan but under nonstandard terms.
Similar to the lender example, home sellers refusing to entertain your competitive offer could also be discriminatory. If you reach out about a home and are immediately told the home isn't available even though you are financially prepared for the property, you should question the denial from the property sellers and "see if the home is still on the market," Kaufman said.
Another form of this is having the availability of housing change from the time of initial contact by phone or email to the time of an in-person visit. Kaufman said she saw this variety of discrimination most frequently.
