NEW YORK (Reuters) –
U.S. house prices rose for a third month in July, but consumer confidence fell unexpectedly in September as the worst job market in 26 years fueled worries about personal finances, private reports showed on Tuesday.

The reports show it is still early days for the economic rebound, following the worst recession in decades, and it could take a long time before consumers begin to contribute to growth.

Also, despite improvements elsewhere in the economy and a roaring stock market rally since March, the weakness of the consumer sector bodes ill for the year-end, which is traditionally a period of heavy shopping and spending.

"While not as pessimistic as earlier this year, consumers remain quite apprehensive about the short-term outlook and their incomes," said Lynn Franco, director of the Conference Board Consumer Research Center.

"With the holiday season quickly approaching, this is not very encouraging news."

Stocks turned negative and the dollar slipped against the yen following the weaker-than-expected consumer confidence report. U.S. government bonds, which are investors' favorite safe haven during weak economic times, pared their earlier losses.

The Conference Board, an industry group, said its index of consumer attitudes fell to 53.1 in September, versus a revised 54.5 in August and expectations of a rise to 57.0.

Reflecting Americans' worries about employment prospects, the Conference Board's index measuring jobs "hard to get" rose to 47.0 from 44.3.

At the other end of the scale, the gauge of "jobs plentiful" fell to 3.4 from 4.3. That was the lowest since February 1983, and ties in with Labor Department data showing the U.S. unemployment rate was at a 26-year high of 9.7 percent in August.

The S&P/Case-Shiller composite index of house prices in 20 metropolitan areas rose 1.6 percent in July from June, more than triple the estimate of a 0.5 percent rise found in a Reuters poll. This index rose 1.4 percent the month before.

"These figures continue to support an indication of stabilization in national real estate values, but we do need to be cautious in coming months to assess whether the housing market will weather the expiration of the Federal First-Time Buyer's Tax Credit in November, anticipated higher unemployment rates and a possible increase in foreclosures," David Blitzer, chairman of the index committee at S&P, said in a statement.

(Reporting by Burton Frierson, Editing by Chizu Nomiyama)