TREASURIES-Prices rise after strong 5-year auction

* Auction of 5-year notes shows surprisingly strong demand

* Third-quarter GDP revised down

* Home prices increase less than expected (Adds analysts quote, updates prices)

By Emily Flitter

NEW YORK, Nov 24 (Reuters) - U.S. Treasury debt prices gained on Tuesday after a $42 billion auction of five-year Treasury notes attracted strong demand, indicating that investor interest in U.S. government debt remained high.

Yields, which move inversely to prices, also moved lower after the latest U.S. economic data showed weakness in the recovery.

"The continued interest in Treasuries is the result of a lack of alternatives," said Lou Brien, market strategist at DRW Trading in Chicago. "This is a flight to quantity. It's the only game in town."

The high yield at the auction, which was part of a total of $118 billion of coupon sales this week, was below rates prevailing in the when-issued market at the auction deadline, indicating dealers were willing to pay a premium for the bonds.

A safe-haven bid was supported after a revision to the government's data for U.S. third-quarter growth came in just below expectations. The government revised down its estimate of growth in gross domestic product to 2.8 percent from an initial estimate of 3.5 percent. The median of forecasts from analysts polled by Reuters was for a revision to 2.9 percent. For details, see [ID:nN24296971].

"This strengthens the Treasury market in the sense that to the extent we think the recovery might be subdued, there are going to be plenty of people out there who want the safety of Treasuries," said Julia Coronado, senior U.S. economist at BNP Paribas in New York.

Weakness in stocks also bolstered the safe-haven bid for lower risk government debt.

Benchmark 10-year Treasury notes US10YT=RR were trading 1/32 higher in price to yield 3.35 percent, while two-year notes US2YT=RR were yielding 0.76 percent from a high yield of 0.80 percent in Monday's auction of the notes.

Data on Tuesday also showed U.S. home prices rose for the fifth straight month in September, but the pace of appreciation was less than expected, according to a report from Standard & Poor's/Case-Shiller.

The S&P composite index of home prices in 20 metropolitan areas rose 0.3 percent in September, below the 0.8 percent rise forecast in a Reuters poll, after a 1.2 percent gain the prior month.

Five-year Treasury notes US5YT=RR were trading 4/32 higher in price to yield 2.14 percent, down from 2.17 percent late on Monday, while 30-year bonds US30YT=RR were 1/32 lower to yield 4.28 percent.

Investors were next awaiting the Federal Reserve's release of the minutes from its most recent policy meeting at 2 p.m. (1900 GMT). (Additional reporting by Chris Reese, Richard Leong and Burton Frierson; Editing by Leslie Adler) ((emily.flitter@thomsonreuters.com; +1 646 223 6310; Reuters Messaging: emily.flitter.reuters.com@reuters.net))