Consumer News: More homebuyers are walking away from contracts

A new survey finds a lot of skepticism

By Mark Huffman of ConsumerAffairs

• Only 2% of consumers say they would buy from an AI-recommended brand without researching it first

• Nearly all shoppers (98%) take extra stepslike reading reviews or searching onlinebefore making a purchase

• The findings highlight a major trust gap as AI becomes more embedded in shopping

As artificial intelligence becomes a bigger part of how people discover products and brands, a new survey suggests it is far from replacing traditional research habits.

Just 2% of U.S. consumers say they would purchase from an unfamiliar brand based solely on an AI recommendation, according to a new study from Idea Grove. By contrast, 98% of respondents said they verify the brand through other sources before making a decision.

The findings point to a clear divide between how consumers use AI and how much they trust it.

AI helps shoppers find options, but doesnt close the deal

AI tools like chatbots and recommendation engines are increasingly shaping the early stages of the buying journey, helping consumers discover new brands and narrow choices.

But the survey shows that most shoppers still rely on traditional signalssuch as online reviews, search results, media coverage, and a companys websiteto confirm whether a brand is credible.

AI is accelerating discovery, but its not replacing decision-making, the report suggests.

That pattern is consistent with broader research showing consumers use AI as a research assistant rather than a final authority. Many shoppers turn to AI for comparisons or suggestions, then verify information elsewhere before completing a purchase.

Trust remains the biggest hurdle

The reluctance to rely solely on AI recommendations underscores ongoing concerns about trust, accuracy, and transparency.

Consumers appear to treat AI suggestions as a starting point, not a guarantee of quality. Instead, they seek out familiar trust markers that predate AI, such as customer reviews and independent validation.

This skepticism is not new, but it is becoming more significant as brands invest heavily in trying to appear in AI-generated recommendations.

Implications for brands and consumers

For businesses, the message is clear: being recommended by AI tools may boost visibility, but it wont automatically translate into sales.

Companies still need to build credibility through strong online reputations, clear information, and positive customer feedback.

For consumers, the trend reinforces the importance of verification in an AI-driven marketplace. Even as technology streamlines shopping, the responsibility for making informed decisions largely remains with the buyer.

But sales were clustered in the Northeast and South

By Mark Huffman of ConsumerAffairs

• Pending home sales rose 1.5% in March, signaling modest momentum entering the spring housing season.

• Contract activity remained below last years levels, falling 1.1% year over year.

• Gains were uneven, with the South and Northeast improving while the Midwest and West declined.

Pending home sales posted a modest increase in March, offering a mixed but slightly encouraging signal for the spring homebuying season.

The National Association of Realtors Pending Home Sales Index, a forward-looking measure of contract signings, rose 1.5% from February to a reading of 73.7. However, activity was still down 1.1% compared with March 2025, underscoring ongoing challenges in the housing market.

NAR Chief Economist Lawrence Yun said the monthly gain reflects underlying demand despite affordability pressures. Contract signings rose in March despite higher mortgage rates, pointing to pent-up housing demand, Yun said, adding that increased inventory will be key to converting that demand into completed sales.

Regional performance mixed

The March data showed a divided housing market across regions. Pending sales increased in the Northeast and Southup 4.4% and 3.9%, respectivelywhile declining in the Midwest and West by 1.3% and 2.6%.

On an annual basis, only the South posted growth, with a 2.3% increase, while the other three regions recorded year-over-year declines.

Economists attribute the Souths relative strength to a combination of job growth, moderating home prices and more favorable homebuilding conditions, particularly in Sun Belt markets.

Mortgage rates and affordability remain key hurdles

Despite the monthly uptick, the housing market continues to face headwinds from elevated mortgage rates and affordability constraints, especially for first-time buyers. Yun noted that younger buyers are particularly sensitive to rate changes, highlighting the need for more smaller and affordable homes.

Even so, improving inventory levels are beginning to support activity. Increased housing supply could help ease price pressures and encourage more transactions in the months ahead, analysts said.

The March increase suggests the housing market may be stabilizing after a slower start to the year, though conditions remain uneven. But contracts signed dont always turn into actual sales.

Real estate brokerage Redfin reported this week that more than 50,000 sales contracts fell through in March, as many buyers had second thoughts or encountered financing issues.

An extended drought is affecting key food-producing regions

By Mark Huffman of ConsumerAffairs

• More than half of the United States is experiencing drought conditions, stressing crops and livestock.

• Reduced yields and higher feed costs are expected to push grocery prices upward in the coming months.

• Consumers could see the biggest increases in produce, beef, and dairy.

After a wet winter, a widespread drought stretching across much of the United States is raising new concerns about food prices, as farmers grapple with shrinking water supplies and declining crop yields.

Recent data show that large portions of key agricultural regions including the Midwest, Plains, and parts of the West are experiencing moderate to severe drought conditions. For consumers, the effects may soon show up at the grocery store.

That would be on top of the inflation shoppers have already experienced. The March Consumer Price Index showed grocery prices were up nearly 2% in the last 12 months, with fruit and vegetable prices rising at twice that rate.

Crops under pressure

Dry conditions are already affecting staple crops such as corn, soybeans, and wheat. These commodities form the backbone of the U.S. food system not only for direct consumption, but also as feed for livestock.

When yields fall, supplies get tighter. That can push prices higher. Farmers are also facing higher irrigation costs where water is available, adding another layer of expense that often gets passed on to consumers.

Fresh produce may be particularly vulnerable. Fruits and vegetables grown in drought-stricken areas can be smaller, scarcer, or more expensive to harvest, leading to noticeable price increases at supermarkets.

Meat and dairy costs could rise

The impact doesnt stop with crops. Ranchers are dealing with parched grazing land and rising feed prices, forcing some to reduce herd sizes. While that can temporarily increase meat supply, it often leads to higher prices later as production tightens.

Dairy products may follow a similar path. Higher feed costs and water scarcity can squeeze dairy farmers, potentially resulting in more expensive milk, cheese, and other staples.

That can create ripple effects for consumers. Economists warn that the drought could contribute to broader food inflation, especially when combined with other pressures like energy costs and supply chain disruptions.

For households already coping with higher living expenses, even modest increases in grocery prices can add up quickly.

What shoppers can expect

While price spikes may not be immediate, experts say consumers should be prepared for gradual increases over the coming months, particularly in:

• Fresh fruits and vegetables

• Beef and dairy products

• Packaged goods that rely on grain inputs

If drought conditions persist into the growing season, the impact could extend well into next year.

For now, much depends on weather patterns in the weeks ahead. But with little relief in sight, the dry spell is shaping up to be more than just an agricultural problem it could soon become a household budget issue nationwide.

Struggling consumers seek value, more affluent consumers seek quality

By Mark Huffman of ConsumerAffairs

• Specialty and discount grocers are gaining market share and foot traffic, outpacing traditional supermarkets.

• Consumers are splitting spending between low-price retailers and premium specialty stores.

• Traditional supermarkets are losing share as shoppers prioritize value, convenience, and targeted purchases.

Higher prices are changing consumer behavior, especially where they shop for groceries.

A new analysis from Consumer Edge shows a growing divide in the grocery industry, with specialty and discount chains outperforming traditional supermarkets, as shifting consumer habits reshape where Americans shop for food.

The report finds that value-oriented and specialty grocers are capturing a larger share of customer visits and spending, while conventional supermarkets are gradually losing ground. The shift reflects broader economic pressures and changing shopper priorities, particularly around price and product differentiation.

Rising food costs have pushed consumers to seek out lower prices, boosting discount chains such as Aldi and Grocery Outlet. Transaction data shows discount grocers have increased their share of the grocery market in recent years, driven by widespread value-seeking behavior across income groups.

But not all consumers are struggling. Specialty grocers including chains focused on organic, fresh, or unique products are attracting shoppers willing to pay more for quality and curated assortments. These retailers have posted stronger traffic growth than traditional supermarkets, with consumers often traveling farther to shop their offerings.

Two kinds of consumers

Together, these two segments are driving what analysts describe as a bifurcation of grocery spending: budget-conscious shoppers gravitating to discounters, while higher-income consumers increasingly favor specialty stores.

Traditional supermarkets, meanwhile, are caught in the middle. While they still account for the majority of grocery visits, their share has been steadily eroding, with foot traffic slipping in recent years as shoppers spread purchases across multiple store types.

The shift is also changing how people shop. Instead of making one large weekly trip, consumers are making smaller, more frequent visits often across multiple retailers to manage costs and find specific items.

Industry insiders say supermarkets are responding by emphasizing private-label products, promotions, and value-focused formats, but the competitive pressure is intensifying. The long-term outlook suggests continued fragmentation, with no single grocery format dominating as consumers balance price, convenience, and quality in new ways.