People have spent up to three years in temporary accommodation, including B&Bs or caravans, due to a shortage in social housing, figures have shown.
More than 4,000 people were placed in temporary housing for an average of 74 days in 2017-18, data obtained by BBC Wales Live has found.
Some were in temporary accommodation for 1,000 days in places including Cardiff, Denbighshire and Gwynedd.
The Welsh Government said it wants to increase social and affordable housing.
Meanwhile, council leaders blamed a “significant under-supply of affordable housing across most areas of Wales”.
BBC Wales Live spoke to one family in north-east Wales who have been in temporary accommodation since summer 2017 after their private landlord sold their house, leaving them unable to find suitable accommodation.
For the first six months they were in hotels, B&Bs and even caravans, before being housed in December 2017, but a non-secure tenancy agreement means their council could move them with a month’s notice.
Nearly two years on, the father said he, his wife and their teenage children were grateful to have a roof over their heads, but the temporary nature of their housing was stressful.
“You just can’t settle, you can’t unpack anything, you just can’t because you don’t know when you’re going to be out,” he said.
“You could be here for three years or you could be here for a few more days, you don’t know.
“They could tell us tomorrow morning that we’re out. It’s very unfair. No-one should be treated that way.”
His teenage daughter added: “It’s so hard – it just crushes you basically.”
Of the 17 local authorities that responded, three had instances of households in temporary accommodation for in excess of 1,000 days – Cardiff (1,119 days), Denbighshire (1,183 days) and Gwynedd (1,020 days).
The longest average time spent in temporary accommodation was in Cardiff with 211 days – about seven months – without a permanent address.
Under Wales’ Housing Act, local authorities have a duty to find accommodation for people who are, or at risk of, being homeless – but there is no limit on how long that should take.
Last year, research by the homeless charity Crisis indicated Wales needed to build 4,000 more houses for social renting each year, for the next 15 years, in order to meet demand.
The Welsh Government’s independent review into housing was published last week, recommending a five-year rent policy for local authorities and the building of new affordable homes.
Katie Dalton, director of Cymorth Cymru, said the report was a step in the right direction, but answers were needed sooner rather than later.
“We need to build more social housing so that there’s more affordable accommodation out there, and we need to look again at welfare reforms because those are pricing people out of the market and then people are stuck in temporary accommodation,” she added.
Kath Jones, from Brynmawr, Blaenau Gwent, was in temporary accommodation for three years.
After a tough upbringing, she found herself homeless in her late 20s and living with serious mental health issues.
She was put in B&Bs in Merthyr Tydfil and Cwmtillery, a homeless hostel in Tredegar and a temporary one-bed house in Brynmawr, she said.
“I didn’t feel safe. They could just knock my door at any time and say ‘get out’. To be honest, I didn’t want to be alive.”
A statement from Blaenau Gwent council said: “The council has an excellent record of dealing with and preventing Homelessness under the 2014 Act.
“We sometimes have to deal with complex cases where a client’s underlying personal challenges can contribute to housing problems.
“In all cases clients are provided with tailored, bespoke advice and support to hopefully resolve the issue and find suitable long-term accommodation.
“As in other areas, single-person accommodation is the most sought after within the county borough where the demand far outweighs the supply.”
The Welsh Government said it was “committed to reducing the use of temporary accommodation by focusing on homelessness prevention and a rapid approach to re-housing through a variety of means”.
A spokesman said this included the Housing First programme and “a record investment of £1.7bn which is on target to deliver 20,000 affordable homes”.
The Welsh Local Government Association welcomed the independent review, saying it could “make a real difference to the development of new affordable homes” as well as councils “now developing new council housing for the first time in many years”.