Objectives Research has suggested that geosocial exposure to out‐groups is associated with heightened threat perceptions on the part of the dominant white majority. However, findings are not consistent. Methods Drawing on realistic group conflict theory and research in political science that privileges the role of the economic context, we test if the effects of geosocial exposure are conditioned on individual expectations about the health of the macroeconomy using a unique data set from the New England states. Results We show that a perceived increase in the presence of immigrants in the community positively correlates with restrictionist immigration policy preferences (in this case support for Arizona's anti‐immigration law), but only when people are pessimistic about the future of the state's economy. Conclusion The information provided by the social context becomes relevant for people's policy preference formation only when they experience or expect material loss.