The explosion occurred Monday afternoon at Xinmin Township in Shaanxi's Fuqu country.
An initial investigation found that the prefab house was located inside a residential compound, but the cause of the explosion was unclear, Xinhua news agency cited local authorities as saying.
News portal Sina.com referenced social media postings about sightings of a person carrying explosive material before the blast, but this has not been verified.
The township's hospital was among the buildings damaged by the blast, Xinhua reported.
Rescue operations were continuing on Tuesday.