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* U.S. single-family home prices rose in November * Yields for 10-year notes back below 2 percent * Treasury to auction $35 billion of five-year notes By Luciana Lopez NEW YORK, Jan 29 (Reuters) - U.S. Treasury prices traded near flat on Tuesday as benchmark yields proved unable to hold above the key 2 percent level, with investors looking ahead to a debt auction later in the day and a two-day Federal Reserve meeting slated to end on Wednesday. Yields on benchmark 10-year notes briefly breached 2 percent on Monday for the first time since April. Treasuries have seen lower yields in recent months as economic uncertainty around the world, particularly in Europe, led investors to safe-haven assets such as U.S. government debt. A move to higher yields, including a move above 2 percent in benchmark 10-year Treasuries, could signal that investors are more willing to take on riskier assets such as stocks. "Monday saw yields reach levels not seen since last April and while we've yet to see a decisive wave of buying, we're cognizant the prior attempts to push yields into this zone have proven buying opportunities," said Ian Lyngen, senior government bond strategist at CRT Capital LLC in Stamford, Connecticut. While technical signals don't yet have the momentum for yields to decisively pierce 2 percent, he said, events later in the week, such as the Fed's policy meeting and key monthly jobs data, could change the near-term outlook. Ten-year notes traded 1/32 higher to yield 1.963 percent early in the New York session, from 1.9703 percent late on Monday. Thirty-year bonds traded flat to yield 3.144 percent. That bond also saw yields around nine-month highs on Monday. The Treasury will sell $35 billion of 5-year notes on Tuesday, with a $29 billion auction of 7-year notes on Wednesday. "A good auction would signal that markets are not convinced that economic data will continue to accelerate from here and perhaps it's already in the price in the near-term," said George Goncalves, head of U.S. rates strategy at Nomura in New York. The U.S. Federal Reserve also kicks off a two-day policy meeting on Tuesday. Investors will scour the statement on Wednesday for hints of uneasiness within the bank around its asset-buying program. Hints along those lines in the minutes from the December meeting, released Jan. 3, sparked a selloff in Treasuries that shook them from their ranges of recent months, bumping up yields. Any further suggestion that the bank could pare back or end its latest round of quantitative easing before the close of 2013 could have a similar effect. Encouraging data have also underscored hopes that the recovery in the world's biggest economy is gaining traction, with data on U.S. home prices on Tuesday that latest example. U.S. single-family home prices rose in November, building on a string of gains that points to a housing market that is on the mend, data from a closely watched survey showed on Tuesday. But a stronger test comes on Friday, as investors look to nonfarm payrolls data. The Fed wants to see unemployment closer to 6.5 percent from its current 7.8 percent, with some analysts saying policy is on hold until that happens.