TREASURIES-Bonds flat as housing jump offsets durable data

* A surge in new home sales put downward pressure on bonds

* Strong headline data, weak details in durable goods data

* U.S. Treasury to sell $39 bln 5-year notes

* Fed buys $2.3 bln long-dated Treasuries

(Updates market action after new home sales data)

By Richard Leong

NEW YORK, Aug 26 (Reuters) - U.S. Treasury debt prices fell in choppy trading on Wednesday, as data showing a surge in new home sales offset a mixed report on durable goods orders but not enough to erase doubts over an economic recovery.

The latest batch of data came in advance U.S. Treasury's $39 billion five-year debt sale later Wednesday, part of this week's $109 billion in long-dated supply.

The huge 9.1 percent rise in new home sales in July, a rise not seen in nearly 4-1/2 years, followed surprisingly strong readings on existing home sales, housing prices, and home construction since last week. The data signaled the battered real estate market is stabilizing, analysts said.

On the other hand, other key areas of the economy such as manufacturing and consumer spending remained spotty and will reduce the chance of a speedy rebound, analysts cautioned.

Therefore, the Federal Reserve will likely keep short-term rates at their historic lows, and investors would maintain a steady appetite for low-risk government debt, they said.

"The news are very encouraging on the housing front," said William Hornbarger, senior fixed income strategist at Wells Fargo Advisors in St. Louis. "But this is not going to be a robust recovery."

The benchmark 10-year note US10YT=RR was flat in price at 101-16/32 after traded between 101-11/32 and 101-24/32. Its yield which moves inversely to its price was 3.44 percent, unchanged from the level late on Tuesday.

The price on actively traded five-year Treasuries US5YT=RR was unchanged for a yield of 2.45 percent.

In the "when-issued" market, traders expect the five-year notes US5YTWI=TWEB to be sold later Wednesday to yield 2.47 percent. This compares with a high yield of 2.69 percent at last month's five-year note auction.

The Treasury will announce the five-year auction resultts shortly after 1 p.m. (1700 GMT).

MIXED DURABLES DATA

Prior to the latest housing data, the government reported durable goods orders rose 4.9 percent in July, above analysts' forecast of a 3.0 percent rise. It was the biggest monthly rise in two years.

But the report showed non-defense capital orders ex-aircraft -- a proxy of general business investment -- declined 0.3 percent. They fell short of a 1.0 percent increase forecast by analysts. For more, click on [ID:nCAT002813] and [ID:nN26257288].

"We need to see capital goods orders net of defense and aircraft rise to signal robust, sustained growth. This is nowhere near so good as the headline print," said T.J. Marta, market strategist of Marta on the Markets in Scotch Plains, New Jersey.

Meanwhile, the Fed bought $2.3 billion in Treasuries maturing in 17 to 30 years, part of its quantitative easing program aimed at lowering long-term rates and to stimulate the economy. For more, click on [ID:nTAR001250]

The U.S. central bank's $300 billion Treasuries purchase program will expire in October. The Fed has bought including Wednesday's purchase almost $271 billion in debt since March.

On the policy-maker front, Atlanta Fed President Dennis Lockhart will speak about the U.S. economy before a business group in Chattanooga, Tennessee at 12:10 p.m. (1610 GMT). Lockhart is a voter this year on the Federal Open Market Committee, the central bank's policy-setting group.

(Reporting by Richard Leong)