AS YOU'VE PROBABLY READ OR HEARD BY NOW, IMMIGRANT and minority buyers are the fastest-growing segment of the new-home market. They account for roughly one-quarter of U.S. households today and will account for roughly one-third by the year 2020. In fact, two-thirds of all the household growth in coming years will come from minority households.

Given their vital importance to the home building industry, we commissioned the Equal Rights Center, a nonprofit group in Washington committed to preserving equal rights in housing, to see how well builders are reaching minority prospects.

The Center sent out five tester groups in three markets—Los Angeles, Washington, and Chicago. Each group consisted of two female buyers, one white and the other either black or Hispanic. Both buyers visited the same new-home sales community. All buyers were pre-qualified for high-end houses in each area, but the minority buyers possessed a somewhat better financial profile.

Sobering Results Each tester was asked to write a detailed, chronological narrative of her test experience. The findings were disturbing. In only two cases did the new-home sales agents treat the potential buyers the same. Every other time, the agents showed a preference for the white buyer.

How did this manifest itself? In many subtle ways. When our minority buyer entered a sales office in Irvine, Calif., she was ignored and had to request assistance. A white buyer at the same office was given a cold drink and escorted to the site of a new home under construction.

One white tester who visited a community in Yorba Linda, Calif., was told that one house was still available in phase 1. She was also given information about houses that would be available in phases 3 and 4. The black tester was not told about the house in phase 1 nor given any information about phase 3 or 4. Instead, she was told that the last remaining home from phase 2 would be sold soon by picking the buyer from a hat.

At a new-home center in Schaumberg, Ill., our minority tester was steered to an outside mortgage broker while a white tester with a poorer financial profile was told to visit with an in-house lender. The minority tester was asked what her husband did for a living, a question the white prospect wasn't asked.

A Hispanic tester in Fairfax, Va., was told the only homes available exceeded her pre-qualified income level. A white buyer, who didn't make as much money, was offered townhomes at a lower price range.

Work That Remains Despite progress on the homeownership front, the rate of homeowners among white households (75%) is well above the rate for black (49%) and Hispanic (48%) households. Both black and Hispanic households have made strong gains in the last 10 years, but they still lag white households by 25%.

Part of this can be explained by income levels. Typical college-educated white households, ages 35 to 44, make a median income of about $57,000, compared to a median income of $46,000 for minority households.

But some of it can't. Sales agents must treat similarly qualified prospects equally. Not to do so in today's market isn't just immoral and, in some cases, illegal, it just doesn't make good business sense. We plan to do a follow-up study next year.

Boyce Thompson, Editorial Director