Eight others were injured, including a baby. The three dead were adults, said State Police Lt. John Agresta.
The blast shook tiny Salem, about 40 miles northeast of the state capital of Albany."It sounded like a hundred sticks of dynamite going off," said Josh Nelson of Salem, who was several miles away.
The blast shook a restaurant a half-mile away, restaurant employee Diane Keys told the Glens Falls Post-Star newspaper.
Neighbor Joseph Brandmeyer ran to the home after hearing the explosion to find pieces of furniture, board and other debris scattered around the yard and road and in trees. He said he saw at least three bodies under tarps.
Brandmeyer said he was helping a woman out of the rubble when he saw spotted her limp baby under a board.
"I started to talk to her and she started to breathe," Brandmeyer said of the baby. "Pray to God she's OK."
It wasn't clear what caused the blast. Brandmeyer overheard one survivor, the man who rented the home, saying he had called his landlord about a propane leak earlier in the day.
Nelson, a construction worker, said he was familiar with the large two-story home. He said debris including two-by-six boards and children's schoolwork was blown into a cornfield across the road.
The force of the blast obliterated the house, sending wood and shingles across the road onto a neighbor's property. Debris was strewn several feet deep across the road while pink insulation hung in the branches of a pine tree in front of the flattened house. A mattress and part of a sofa lay in the road and a car with its hood blown open sat on the property. Cinderblocks were thrown 50 yards onto a neighbor's yard. The blast buckled the doors on the garage of the house across the road.
Firefighters continued to douse the smoldering pile of wreckage in the late afternoon while investigators took photos of the site.
Salem, a rural town known for its scenic covered bridges, museums, handsome period homes and historic landmarks from Revolutionary War days, is on the Vermont border southeast of Lake George. The house was on a road of widely spaced homes separated by farmland.
John Buckley, who lives less than 200 yards from the explosion scene, said he was watching television when the blast shook his house.
"I heard one great big boom," he said. "I came out and all I saw was a cloud of smoke and a little bit of fire and that was it."
Buckley said the family had moved into the house earlier this year but he didn't know them very well.