The Economy in Virginia
According to the Weldon Cooper Center at the University of Virginia, economic conditions in 2026 in Virginia are expected to weaken, and the state's real GDP is expected to slow. Virginia is projected to close 2026 with its second consecutive year of net employment decline. More than 10,000 Virginians are expected to lose their jobs in 2026, with manufacturing jobs expected to decline by 3.9%. In 2025, Virginia underperformed compared to the national economy and will underperform in 2026 as well, according to the Cooper Center.
"The state's inflation path remains below the national forecast, but prices continue to rise while labor market conditions weaken," according to the Weldon Cooper Center's May 2026 report.
According to Virginia Tech professor George Davis of the Department of Agricultural and Applied Economics, there has been an influx of people in need of food assistance largely due to reduced SNAP benefits and rising food prices. The Blue Ridge Area Food Bank expected approximately 360,000 pounds of food from federal contracts last summer that were canceled.
"Housing activity remains constrained with rent growth continuing and permits declining," according to the Weldon Cooper Center May 2026 report. "Home sales are expected to fall in 2026."
According to the industry association Virginia Realtors (April 6, 2026), the war against Iran has had a negative impact on real estate sales. “Just two days before the strikes began, Freddie Mac reported the national average rate on a 30-year-fixed-rate-mortgage had dipped to 5.98%, its lowest point in three and a half years. Unfortunately, that milestone lasted less than 72 hours. Almost immediately after the war with Iran started, the 30-year-fixed-rate-mortgage started trending up. As of April 2nd, the rate had risen to 6.46%, almost half a percentage point higher.” It continued, “The Iran war has transformed what was shaping up to be the best home buying environment in years into a market defined once again by uncertainty and elevated costs.”
According to Old Dominion University Dragas Center for Economic Analysis and Policy (June 5, 2026), “Virginia’s real GDP growth slowed in 2025 and will remain anemic in 2026 due to declines in federal civilian employment, higher tariffs, changes in immigration policy and policy uncertainty.”
