The incident occurred on Thornton Lane, High Marishes, near Malton at around 3.25am on Thursday.
A red five-door Ford Fiesta crashed through a fence and demolished the living room of the house.
The owners of the property were in bed at the time and were able to get to safety and call 999.
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. He been 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]
Please quote reference number 12210202699 when providing details.