Neighbours in Mitchell Street, Hartlepool, were temporarily evacuated after an explosion was heard, a window was blown out and the top floor of the vacant property was alight.
Cleveland Police closed a number of roads in the area while emergency services dealt with the incident after the alarm was raised at just before 8pm on Sunday.
The force revealed on Monday that a juvenile had been arrested on suspicion of arson and was in custody while helping officers with their inquiries.
Hartlepool Neighbourhood Police Team announced on Tuesday: “As enquiries into a suspected arson at a vacant property in Mitchell Street in Hartlepool continue, a further juvenile male was arrested late yesterday.
“Both juveniles arrested in connection with the fire have been interviewed and bailed with conditions.”
Cleveland Fire Brigade spent more than an hour tackling the blaze.
North East Ambulance Service were also called and a spokesperson said: "We received a call 19.55 yesterday to reports of a house explosion on Mitchell Street in Hartlepool.
"We sent two hazardous area response teams, an officer, an emergency ambulance and a doctor from the Great North Air Ambulance Service. All our teams stood down on scene with no patients requiring treatment."
Police added: “We would appeal for anyone with information, CCTV or dash cam footage which could help our ongoing inquiries to get in touch.”
Anyone with information should contact Cleveland Police by calling 101 and quoting reference 105356.
Anyone wishing to leave information anonymously should call Crimestoppers on 0800 555 111.