The incident happened at 4:10 a.m. Sunday at 115 Stelton Rd. in Piscataway.
Police say the house was fully engulfed after the explosion and at least one neighboring home was damaged.
A resident of the house, a man in his 50's, was hospitalized in critical condition with second-degree burns but is expected to survive.
"It's just amazing the fact if you look at the destruction in the background that anyone could have gotten out of the explosion alive, so the fact that the individual is alive is a miracle unto itself," said Piscataway Mayor Brian Wahler.
Authorities believe the blast was the result of a gas explosion.
Within about an hour, the fire was about 95% contained. The fire department continued working on some hot spots.
One resident said he heard a loud explosion followed by several smaller ones, almost like fireworks. Debris was blown onto the next block.
PSE&G reported almost 1,900 customers without power in the area around the explosion, but power was later restored.
Wahler asked residents to stay away from the area so the arson squad can investigate and Public Works could clean up the scene.