Those in the market for a big sparkler could be in for reverse sticker shock. Natural diamond prices have fallen by 26% over the past two years, while lab-grown alternatives are down 74% compared to 2020.¹  The news comes as diamond leader De Beers revealed a 26% year-over year decline in rough diamond production amid a challenging market, dropping from 7.9 million carats in Q4 2023 to just 5.8 million carats in Q4 2024.²

The falling price of diamonds

For consumers in the market for a diamond, the shift could be an opportunity to snag a great deal. Americans prepping for a proposal can now afford to go bigger than ever before, thanks to significant changes in the engagement ring market in recent years. According to Tenoris, which tracks retail diamond prices across the U.S., natural diamond prices peaked in 2022 alongside a huge increase in demand post-pandemic.³ Since then, lower demand, a challenging economy, fewer marriages, and — most significantly — the soaring popularity of lab-grown diamonds, has resulted in continuing declines. The average price of a one carat natural diamond hit $6,819 in May 2022 and by last December had fallen to $4,997.⁴

While the average cost of an engagement ring comes in at $5,200, how much sparkle consumers get for their savings largely depends on whether the diamond is mined or made.⁵ At one leading jeweler, $5,000 spent on a lab-grown diamond will yield a rock roughly four times bigger than if the money was spent on a natural diamond of similar quality.⁶ Now, almost half (46%) of the diamonds sold in the U.S. are lab-grown.⁷

Read more: How much money should you spend on a wedding ring?

Love in color

Lab-grown diamonds, virtually indistinguishable from natural ones, have disrupted the engagement market and are reshaping consumer preferences in the process.  Since De Beers, the world’s leading diamond company, popularized the slogan “diamonds are forever” in the 1940s, diamonds have become synonymous with engagement rings. But in a market where diamonds are so easily accessible, are they losing their sparkle?

Once a signal of rarity, natural diamonds have lost a degree of their cachet with the influx of lab-grown diamonds. Now, some women are sidelining white diamonds for the individualism that colored stones like sapphires, rubies, and emeralds offer. Jewelers have reported a huge demand for colored engagement rings, particularly in green or teal hues, perhaps inspired by Princess Diana’s iconic blue sapphire.⁸

In recent years, the colored gemstone market has experienced notable growth. In 2023, the market was valued at approximately $9.4 billion, but by 2028 it’s expected to reach $12.7 billion.⁹ Some experts say a colored stone can be an investment opportunity. Since 2020, prices for gems like sapphires and rubies have increased over 13% and continue to trend upward.¹⁰

Read more: Is jewelry a good investment?

Prestige under pressure

Experts predict that the price of lab-grown diamonds will continue to decrease in the coming years. If dwindling prices cheapen lab-grown diamonds’ luster, this could create an opportunity for natural diamond retailers to regain market share.¹¹

For now, luxury jewelers are faced with the challenge of convincing consumers that a natural diamond is still worth the cost at a time when near-identical stones can be purchased at a fraction of the price. In response, De Beers is shifting its marketing focus to drive desirability for natural diamonds, aiming to transform the narrative by connecting an individual’s unique journey to that of a De Beers-sourced stone.¹²