“Rents keep going up,” said Joe Atkins, a self-employed real estate broker overseeing 12 agents in Dallas who lease and sell residences. “A lot of my clients, it’s a better value play to buy than rent. If they can find something.”

The average mortgage cost 21 percent of average household income in the Dallas area in the fourth quarter, compared with 28.5 percent of income to rent, according to Zillow. The U.S. average was 21.4 percent to own, compared with 30.1 percent to rent.

Josh Griffith, 29, decided to buy in Dallas after watching prices for homes and rentals rise, and expecting an increase in borrowing costs. He made a down payment on a new $355,000 house where he plans to live with his wife, Amanda, when construction is completed late this year. Several friends are also buying in the Bishop Arts District, a neighborhood of boutiques, coffee shops and art galleries, he said.

“We’re all getting around 30,” Griffith, a strategic planning consultant for Southwest Airlines, said in a telephone interview. “We’re all advancing in our careers and earnings are going up and we all want to stay in the Dallas area. We’re getting married and kids are just a year or two away”

Buyer Challenges

Sales are still subdued around the country as wages grow slowly. Previously owned homes, which make up about 90 percent of the market, sold at an annual pace of 4.88 million in February, less than the average of 5.27 million dating to 1999, according to the Realtors association.

Homebuilders have been waiting for pent-up demand to kick back in since construction started sliding in 2006. Purchases of new homes rose to a 539,000 annual pace in February, the most in seven years, the Commerce Department reported Tuesday. Earnings reports last week from Los Angeles-based KB Home and Miami-based Lennar Corp. pointed to stronger orders and growing confidence that buyers are finally returning.

‘Right Opportunity’

Demand from first-time buyers is slowly getting back to normal, said Ara Hovnanian, chief executive officer of Red Bank, New Jersey-based homebuilder Hovnanian Enterprises Inc.

“A lot of people doubled up after the recession,” he said Wednesday in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “They went back home or rented with friends and they’re waiting for the right opportunity, waiting to qualify. Everything is going up, and that really helps the cause for buying homes.”