Hundreds of households were classed as overcrowded in Ceredigion, according to figures from the 2021 census show.
A campaign group has blamed overcrowding on slow rates of housebuilding and "skyrocketing" rents across England and Wales.
Figures show around 430 homes were judged to be overcrowded in Ceredigion – 1.4 per cent of all homes in the area.
Meanwhile, 24,815 homes (80.3 per cent) were classed as 'under-occupied' – meaning they had rooms to spare.
Overcrowding is calculated by looking at how many rooms are available in a residence and assessing whether they are adequate for the number of people living there.
The ONS' figures show renters were more likely to live in crowded accommodation than those who own their own homes.
In Ceredigion, private renters and those living rent free were most likely to struggle for space, with 2.7 per cent impacted.
Ben Twomey, chief executive of the campaign group Generation Rent, said a failure to build enough homes and stop "skyrocketing" rents has put private renters in a tricky situation.
"If you have children or are an older renter, being forced into an overcrowded house can be particularly stressful," he added.
As of 2021, there were around 175 households with dependent children suffering from a lack of space in Ceredigion.
Across Wales, households comprised of people of black backgrounds had the highest rates of overcrowding, at 11.9 per cent of homes – compared to 2.2 per cent across the general population.
In addition, Muslim households were nearly seven times as likely to be overcrowded.
Sam Tims, senior economist at the New Economics Foundation, said it was no surprise some groups were suffering worse housing conditions.
He said: "Every family deserves to live in an affordable and comfortable home, near to friends and family with access to good public services.
"Yet while over two-thirds of houses across the country are under-occupied, the worsening housing emergency is forcing over a million households to live in homes too small for their needs."
Mr Tims further cautioned a "miserly" welfare system was further exacerbating the problem.
London had a far higher rate of overcrowded housing than any other region of England and Wales. Every one of the top 10 most crowded areas was in the capital – other than Slough, in London's commuter belt.
Both the New Economics Foundation and Generation Rent said building more social homes is the first step to tackling the issue.