The town's engineer arrived at the place and said that three families must be evacuated from the building.
Another rocket landed in a nearby moshav. There were no injuries in both incidents.
Following the heavy damage, Sderot Municipality officials were called to arrive at the place immediately in order to find an alternative place for the families to reside before the holiday.
The Sderot Municipality said in a statement: "In the past two weeks Qassams have been fired in fixed hours between 6 and 9 a.m., which are critical hours during which students leave for school and adults leave for work. We have also noticed that the rockets themselves have become more sophisticated, causing more serious damage."
House hit in Sderot (Photo: Nir Vaaknin)
In the afternoon, Palestinian gunmen fired two Qassam rockets from the northern Gaza Strip at Israel. One of the rockets landed in the Sapir College in Shaar Hanegev, causing damage. There were no injuries.
Another rocket landed in an open area in the northern part of Sderot.
An eyewitness at the Sapir College said: "We heard a very strong explosion and then discovered that the rocket landed inside the building. The rocket hit the roof of the building and caused damage to its upper part. Luckily, there were very few people in the place. They panicked and were treated on the scene."
'Children wake up to a Russian roulette'
Avi Farhan, a former Elei Sinai resident who moved to Sderot, told Ynet about the resident's fears.
"This morning we were once again woken up by the Qassam fire and the Red Color warning system. Our children and grandchildren wake up to a Russian roulette before leaving for school.
"We are being fired at from the areas where we used to live – Dugit, Elei Sinai and Nisanit. We call on the IDF and the prime minister to go in and permanently take over the range of hills overlooking Ashkelon and Sderot," he said.
On Wednesday, a 15-year-old boy was lightly to moderately wounded by shrapnel and several people suffered from shock after a Qassam rocket landed near Kibbutz Erez in the south. Another rocket landed in an open field near Kibbutz Nir Am but apparently caused no injuries or damage.
Palestinians have been firing rockets nearly every morning in the past few days, but the attacks last only a few hours.
Defense Minister Amir Peretz referred to the Qassam fire during a visit to Sderot on Wednesday.
"We are operating in all areas in order to reach all the launching sites. We are exerting heavy and unstoppable pressure on the organizations. It is true that in the past two weeks there has been another eave of Qassam rockets launched at Israel. Maybe this is a reaction to the political developments in the Strip, but we have no reason to make concessions. We have the ability to continue with this pressure and it does have an influence," he said.