The report, by Wales' Children's Commissioner Sally Holland, found homes provide the right care for some, helping them feel more stable.
But it also highlighted concerns, such as children being criminalised by frequent police call-outs.
Thirty-four looked-after children were interviewed, along with professionals.
Ms Holland called on people who work with children in care to listen to their opinions and experiences.
"They are the experts on what works and it is important that their voices are heard," she said.
Children leaving residential care at 18 feel they lack support while others claim they have limited say in where they will live, a report has found.