Freddie Mac forecasts a 5 percent increase in 2011 home sales over 2010, according to its U.S. Economic and Housing Market Outlook for April.

The report also contends that refinancing will likely account for a smaller share of loan applications later this year as wealthy borrowers decrease and mortgage rates increase.

“Expect to see a bit of spring in homes sales activity during the second quarter,” said Frank Nothaft, VP and chief economist at McLean, Virginia-based Freddie Mac.

Nothaft continued, “Sales contract signings for existing homes were up in February, positioning the market for a bounce up going into the traditional home-buying season.”

The expected pick-up in home sales is due to recent positive employment reports, the Market Outlook reveals. Unemployment declined for the fourth straight month to 8.8 percent, and net employment increased by 216,000 jobs. Real estate employment was up by 10,000 jobs since last November.

The report also calculates that the share of adjustable-rate mortgage loans will be 7 percent in 2011 compared to the 5 percent 2010 average.

Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.