The blast struck late Sunday in the town which is the capital of Chin, a mountainous western state that borders both Bangladesh and India and is one of Myanmar's poorest.
"Six people died and seven are in the Hakha hospital," Than Kyaw Htay, an officer at the town's police station, told AFP by telephone.
He said the cause of the blast was unknown but gunpowder or some sort of explosive was suspected.
Eyewitness Ko Ko arrived on the scene shortly afterwards.
"The explosion was strong enough to destroy the house completely as well as damage other buildings nearby."
Myanmar's border regions are beset by a multitude of long-running ethnic insurgencies but Chin has been largely free of such violence in recent years.
Hakha itself is built on a mountainside and suffered widespread damage this summer from landslides caused by torrential monsoon rains.
According to the United Nations, 73 percent of the state's nearly 500,000 residents live under the poverty line, more than twice the national average.
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