The housing market should skirt another major downturn, even though stubbornly high unemployment and foreclosures will curb demand and keep home prices mostly flat through 2011, a Reuters poll showed.

Home properties in the 20 biggest U.S. metro areas could end up with a tiny rise in value this year despite government tax credits to homebuyers ending more than three months ago, according to the poll.

But with a slowing recovery and tight lending standards, most economists predicted it could take at least five years for average home prices to revisit their 2006 peaks prior to the worst housing crash since the 1930s Great Depression.

Large supply of houses in foreclosure and people putting homes on the market will send prices down through the first quarter, said David Wyss, chief economist at Standard & Poor's Ratings Services in New York.

Wyss thinks the worst for housing is over, and houses are back near normal.

Most economists reckon a major double-dip in the housing market is unlikely, but they do expect a modest summer decline thanks to the expiry of government programs that drew demand forward and propped up home values earlier this year.

Such a pullback could drag average prices down another 4.5 percent for a cumulative drop of about a third from where home values peaked in 2006, the poll showed.

Home prices as measured by the Standard & Poor's/Case-Shiller 20-city index should rise a meager 0.2 percent this year, followed by another 1 percent increase in 2011, according to the median forecast.

In the May survey, the consensus was for a 1.4 percent rise this year and 3 percent next year.

Some hard-hit areas where speculators drove prices to stratospheric levels are vulnerable to further price declines, economists cautioned. But property values in most large U.S. cities will probably still eke out small gains this year.

PUBLIC HELP FOR PRIVATE WOES

The housing market should perk up later this year following the summer slowdown in activity, said Robert Denk at the National Association of Home Builders in Washington.

Softness in the summer months will be followed by firming conditions and momentum as the year unfolds and the economy strengthens, Denk said, despite growing prospects for a serious economic slowdown that has the central bank worried.

The Federal Reserve took the dramatic step on Tuesday of renewing its programme of purchasing U.S. government debt in an effort to lower long-term interest rates, and to stimulate lending and investment.

It said it would take the proceeds of maturing mortgage-related debt it bought during the worst of the financial crisis and reinvest them into U.S. government debt, maintaining its expansive balance sheet and therefore ultra-loose monetary policy.

The Fed is seen leaving interest rates on hold near zero until at least the middle of next year, a Reuters poll of primary dealers showed on Tuesday after the Fed's announcement.

Previously, some economists had hoped that solid job growth, combined with rock-bottom mortgage rates, would support a housing recovery, as federal tax credits for home purchases as large as $8,000 wound down.

But persistently high U.S. unemployment and the choking effect it is having on consumption has prompted analysts to trim their growth outlook for remainder of the year, a recent Reuters poll showed.

Hiring among private U.S. companies in June was far weaker than expected, official statistics showed last week, and there seems little prospect of strong jobs growth any time soon.

A sustainable recovery in housing depends on a sustainable recovery in the job market, said Scott Brown, chief economist with Raymond James in St. Petersburg, Florida.

(Polling by the Bangalore Polling Unit; Additional reporting by Dinesh Mehta, Editing by Ross Finley/Ruth Pitchford)

Unemployment