If a real estate broker tries to scare buyers into selling their homes by indicating that certain ethnic groups are moving into the neighborhood, what illegal activity is the broker engaged in?

The activity described involves a broker using fear tactics related to racial or ethnic shifts in the neighborhood to pressure homeowners into selling their properties. This practice is known as blockbusting. The intent behind blockbusting is to create panic among homeowners, leading them to sell their homes for less than they are worth, so the broker can then sell those properties at a profit to other buyers, often from different demographic backgrounds.

Blockbusting exploits the fears of current residents about declining property values or changing community dynamics due to the influx of different ethnic groups. This practice is not only unethical but also illegal under fair housing laws aimed at preventing discrimination and protecting the rights of all individuals to benefit from the housing market without fear of coercion or manipulation based on race or ethnicity.

The other options refer to different concepts: redlining involves discrimination in lending practices, steering involves guiding prospective buyers toward or away from certain neighborhoods based on their race or ethnicity, and discrimination is a broader term that describes unfair treatment based on personal characteristics. The specifics of the scenario provided clearly align with blockbusting given the focus on instilling fear related to demographic changes.