WASHINGTON (Reuters) - U.S. sales of existing homes likely rose to their highest level in 10 months in July, according to a Reuters poll, as buyers rushed to take advantage of a tax credit for first-time homeowners.

The survey of 61 economists predicted sales of previously owned homes climbed to a seasonally adjusted annual rate of 5 million in July, the briskest pace since 5.1 million units were sold in September, from 4.89 million units in June.

That would also mark the fourth straight monthly gain in home resales.

As part of the American Recovery and Reinvestment Act, the Obama administration has made up to $8,000 available to qualifying taxpayers who buy homes this year. The program, credited for the signs of a turn around in the three-year housing slump is scheduled to end in November.

Adding to the picture of a steadily improving resale housing market were still relatively low mortgage rates, an improving economic outlook, and the fifth straight monthly rise in pending home sales, analysts said.

The National Association of Realtors will release U.S. existing-home sales data on Friday at 10 a.m. EDT.

The following is a selection of comments from economists.:

BMO CAPITAL MARKETS

Forecast: 4.99 million units

"Affordability looks good, though it's off record highs because of firming mortgage rates and sagging incomes. Cheap, foreclosed properties still account for roughly one-third of sales, but overall demand is starting to revive."

JPMORGAN CHASE BANK

Forecast: 4.95 million units

"This would be the fourth consecutive rise and, if realized, sales would be roughly back in line with the level that prevailed from the fall of 2007 to October 2008. Gains in affordability over the last year, more foreclosure sales, and an improving economy could then lift sales further later in the year."

MOODY'S ECONOMY.COM

Forecast: 4.99 million units

"Existing home sales will probably continue to firm in coming months as the economy begins to rebound, more foreclosures come on to the market, and prospective buyers take advantage of increased affordability. One possible concern is an apparent increase in the share of contracts falling through and not being counted as home resales. The increase in the share of scuttled contacts is apparently being caused by new rules that produce more conservative valuations, and have prevented some potential home buyers from obtaining financing."

(Polling by Bangalore Polling Unit)

(Reporting by Nancy Waitz; Editing by Neil Stempleman)