This is an advanced grammatical construction in Spanish, and one that is usually not encountered until the fourth semester of college Spanish. This is going to get a bit complicated, so bear with me. The word haber (to have) has two uses. It is used primarily as an auxiliary verb to form perfect (action completed) tenses, and is used in conjunction with the past participle of the action verb: he comido, has comido, ha comido—I have eaten, you have eaten, he/she/it has eaten, etc. This is covered in the second semester of college Spanish. It also has a second meaning, which is to indicate the concept of there is/there are. When used in this sense, it occurs only in the third-person singular. It is conjugated exactly as the third-person singular of the auxiliary form of haber, except that its present indicative form is hay instead of ha. This is where the word hay is actually derived from. Most beginning Spanish students are familiar with the word hay when used to indicate the concept of there is/there are, but they don’t realize that it is actually a conjugation of the verb haber. Que hubo, therefore, translates to “what was there/what were there”, and the sentence seems to mean “there was an explosion in the house”? But it seems to me to be a very strange grammatical construction. ‘Que hubo’ by itself literally means ‘what was there’ or ‘what were there’, but is actually a colloquialism meaning ‘how are things’?
The above was paraphrased from chapter 30 of A New Reference Grammar of Modern Spanish, by Butt and Benjamin. If you really, really, really want to understand Spanish grammar, get a copy of this reference. It is the most thorough exposition of the subject I have ever encountered. If you read this entire book, memorized it, and understood it, you would essentially know everything there is to know about Spanish grammar.