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Mortgage company projects existing home sales increasing more than 8 percent in 2011

Mortgage company predicts 2011 to be a positive year for existing, new homes.

Mortgage company predicts 2011 to be a positive year for existing, new homes.

With the economy improving and affordability growing, PMI Mortgage Insurance Company is expecting 2011 to be a prosperous year for existing and new home sales.

PMI Mortgage Insurance - a private mortgage insurance company that's based in walnut Creek, California - says it projects existing home sales to rise 8.3 percent above last year and new home sales to rise 29 percent above last year. That would total 5.31 million existing units sold and 415,000 new units sold.

With more people buying and moving, PMI expects mortgage rates to stay in the 5 percent range throughout the year but the rate will likely jump up to 6.5 percent come the end of 2012.

"At this point, it is more likely that mortgage rates are rising because of strong economic growth than for other reasons - or at least mostly for growth reasons," PMI said.

Freddie Mac's primary mortgage market survey has 30-year fixed-rate mortgages hovering in the 5 percent range, which are historically low.