The red Ford Fiesta left Thornton Lane in the hamlet of High Marishes, near Malton, between 3-4am on Thursday, crashed through a fence and collided with Hawthorn Cottage.
The owners, who did not wish to be identified, were asleep upstairs at the time but the living room of their property suffered extensive damage.
A large hole in the wall has now been boarded up and debris is being cleared.
The passenger in the car, a 20-year-old local man, suffered serious injuries and was taken to hospital by ambulance. His condition is critical.
The driver, a 19-year-old man from the Driffield area, has been arrested and released under investigation.
Witnesses to the collision or anyone who recalls seeing the red Ford Fiesta prior to the incident as it travelled from the direction of York are urged to call North Yorkshire Police on 101, select option 1, and speak to the Force Control Room or email [email protected]