Household ownership of municipal bonds catapulted over the $1 trillion mark for the first time ever in the first quarter of 2010. Meanwhile, foreign investors seeking a greater footprint in the municipal market via taxable Build America Bonds held $71.9 billion in their largest-ever presence in the market, according to new Federal Reserve data released yesterday.

Households held $1.02 trillion — roughly 35% — of the $2.834 trillion in outstanding municipal debt through the end of the quarter that ended March 31. Although households only increased their assets by 2.1%, or $21.3 billion, from $998.9 billion they held at the end of the fourth quarter of 2009, the latest milestone pushed the sector closer to doubling the $531.2 billion it owned in 2000.

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