Firefighters from numerous surrounding towns were called in to help battle the blaze.
The call went out shortly before 9 a.m., at which time flames and smoke could be seen in the house at 119 Village Road.
"The main fire was in the kitchen under the sink, was where the main fire was at first. And then, of course, it went up inside the walls," Steuben Assistant Fire Chief Robert Ginn said.
Neighbors said the home was owned by a man from out of state. No one was home at the time of the fire, according to firefighters.
Firefighters said an older house like the one that burned in Steuben on Monday presents its own set of challenges.
Several people said the owner was in the process of renovating the colonial single-family house and turning it into a bed and breakfast.
The house in Steuben had been remodeled, so it has ceilings and drop ceilings. And when fire gets into those places, it becomes trapped, making it harder to extinguish, fire officials said.
Ginn said an investigation into the cause of the fire will be conducted by the state fire marshal's office.