The man's body was discovered by Durham police making a routine visit to the address in Pine Street, Grange Villa, near Chester-le-Street, yesterday.
Officers had attended following reports of an incident at the property and forced entry on becoming suspicious.
The victim - thought to be in his late 20s - was found in one of the bedrooms.
He was tied up and appeared to have been the victim of a serious assault, and nobody else was present in the house at the time.
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A formal identification has yet to take place but police believe they know who the man is.
A post-mortem examination is expected to be carried out in due course to try and establish a cause of death.
A cordon has been set up in Pine Street and crime scene investigators will be at the house all day today and most of Monday.
A Durham police spokesman said: “We have made two arrests in connection with the Grange Villa murder, a woman aged 19 and a man aged 25. Further arrests are likely.”
The investigating officer, Detective Superintendent Adrian Green, said: “I know many people in Grange Villa will be shocked by what has happened and I understand their concerns.
“I would like to reassure them that we believe this incident was not random and that those involved were known to each other.
“I have a team of detectives carrying out enquiries in the area and I would urge anyone who has information which would help us trace those responsible to come forward.
“Grange Villa is a tightly-knit place and many people will already know a great deal and will be discussing it among themselves.
“We will also have extra patrols in the village over the next few days to provide additional reassurance to local residents.”
The force’s Major Crime Team has set up an incident room at Chester-le-Street police station and anyone who can help is asked to contact them via 101.
They can also call Crimestoppers on 0800 555111.