Racial differences in the search for housing: Do whites and blacks use the same techniques to find housing?

Abstract

Abstract Studies report that real estate brokers often provide less information to black clients than to whites and steer them to different neighborhoods. However, few studies have investigated racial differences in housing search procedures. If blacks believe they will receive less useful information from brokers, they may avoid them. Analyzing 1992 data from Detroit, this study finds that blacks were significantly less likely than whites to consult brokers. Blacks tended to rely more on methods such as talking with friends, checking newspaper ads, or driving through neighborhoods. Blacks were also more likely to believe that they missed housing opportunities because brokers discriminate. Differences in the socioeconomic characteristics of subjects account for some of the differences in the use of brokers. Eradicating discrimination by brokers will broaden housing opportunities only for blacks who use brokers. Policy actions that address the perception of discrimination by brokers may be a more powerful tool.