Does a person's lifestyle

Every one represents a personality not just his/her belief system . And so you know personality is shaped by many factors like education, parents, friends, culture and customs, experiences and last but not the least belief system.

Yes it is natural to stereotype but I guess it is an animal instinct still present in some humans. Muslims are not the only species stereotyped in West . There are blonds, then there is battle of sexes based on gender stereotyping. Rednecks, cowboys, Yankees , Irish , German all kinds of stereotypes are present in west.

Why do we stereotype you ask ?
Many factors :
1. We are looking for common factors. It helps us remember.
2. people prefer to hang out with people who are like them at a certain level. You feel completely accepted in your group.
3. we have certain types of fears
4. we don't trust our thoughts,instincts,intelligence and intuition.
being a stereotype is far more easy
5. ignorance and mental laziness

On a lighter note , there is positive stereotyping also.
Like people living in cities are stereotyped as cultured , liberal and open minded.
Chinese students are stereotyped as brainiacs in west.
A couple of decades ago in USA people from India and Pakistan were considered as either doctors or engineers only.
Same used to be the case in Middle East.