Households remained the biggest owners of municipal bonds in the first quarter of 2013 while mutual funds and U.S. chartered depository institutions increased their share of the $3.7 trillion market.

Household ownership of munis declined by $123 billion, or 6.9%, to $1.66 trillion from a year earlier, and was little changed from the end of 2012, according to quarterly data from the Federal Reserve Board. Mutual funds and the depository institutions followed as the next largest holders, owning $644.4 billion and $374.2 billion in the quarter, respectively, up 15% and 22% from the same time a year ago. The municipal market rallied with yields at historic lows, boosting total outstanding debt to $3.72 trillion, up 0.2% from a year earlier and 0.4% from the end of the previous quarter, the Fed data showed.

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