The debate about racial residential preferences has two open questions. First, are neighborhood racial preferences truly racial, or is race a proxy for socioeconomic factors? Second, are in-group or out-group preferences more salient? Using the Houston Area Survey, we employ a factorial experiment to assess the effect of racial composition on neighborhood desirability independent of crime, school quality, and property values. We survey whites, blacks, and Hispanics to examine in-group versus out-group preferences. Results show that independent of proxies, whites find neighborhoods less attractive as the proportion black or Hispanic increases; the proportion Asian has no impact. Racial composition has little effect on Hispanics' and blacks' neighborhood preferences. We find no evidence of in-group preferences; rather, results suggest that whites express negative out-group preferences toward black and Hispanic neighborhoods. (Contains 12 notes, 5 tables, and 1 figure.)