The withdrawal of rural households from their homestead sites is an inevitable step in rural revitalization and a product of urbanization reaching a certain stage of development. This study analyzes the practical challenges faced in the withdrawal of homestead sites in traditional agricultural areas. Based on questionnaire data from a traditional agricultural area, statistical analysis and binary logistic regression models are employed to investigate rural households’ willingness to withdraw from their homestead sites and the factors influencing this decision. The study also explores potential pathways to alleviate the challenges associated with homestead site withdrawal in traditional agricultural areas. The results show that the surveyed farmers have a low level of understanding regarding homestead withdrawal, and their overall willingness to withdraw is weak, with less than 30% expressing such intent. The primary factors influencing the willingness to relinquish homestead land include the educational level of farmers, their understanding of whether homestead land can be bought and sold and its ownership status, the type of insurance they participate in, whether they already own housing in urban areas, as well as the geographical conditions of the village, annual household income, and the utilization status of homestead land. The first five factors have a positive influence on the willingness to relinquish homestead land, while the latter three have a negative influence. Strengthening publicity and promotion, establishing exit incentive mechanisms, improving relevant laws and regulations, and developing diverse compensation funding sources are the key pathways to enhance farmers’ willingness to exit homestead land.