Close social networks provide older persons with resources, including social support, that maintain their well-being. While scholarship shows how networks change over time, a dearth of research investigates changing social contexts as causes of network dynamics. Using the first two waves of the National Social Life, Health, and Aging Project survey ( N = 1,776), this study shows how rising neighborhood-level concentrated disadvantage through the Great Recession of 2007–2009 was associated with smaller close networks, largely due to fewer new close ties gained, among older Americans. Worsening neighborhood circumstances pose obstacles to older residents’ acquisition of new close ties, including heightened fear, lower generalized trust, stress and depression, and declines in local institutions that attract both residents and nonresidents.