The La Cumbre Vieja volcano erupted on Sunday shooting 1,000C lava hundreds of metres into the air streaming towards towns and forcing thousands to evacuate.
No fatalities have been reported but the volcano was still active on Monday as experts fear the eruption could last for weeks or even months.
Mariano Hernandez, president of La Palma's council, told Cadena Ser the lava flow has destroyed about 100 houses so far.
Local authorities have evacuated about 5,000 people from four villages, including El Paso and Los Llanos de Aridane, Canary Islands regional president Angel Victor Torres said on Monday morning.
Around 500 tourists were rescued from a hotel in the coastal resort of Puerto Naos and offered emergency accommodation in an old barracks in Santa Cruz.
Mayor Sergio Rodriguez said the molten rock was now spreading through the village of Los Llanos de Aridane "where hundreds of houses are at risk".
"The lava left absolutely nothing in its path", Rodriguez told TVE.
Terrifying footage revealed the moment a river of orange-topped volcanic rock swept into the garden of a house as firefighters made a desperate bid to stop the lava.
The dramatic video showed the lava bursting through the ground-floor windows of the house as the river of molten rock smashed its way into the dining room.
The luxury home was one of 20 properties engulfed in the village of El Paso by the endless flow of volcanic rock spewing from the volcano overnight.
Another video showed a stream of magma swallowing a house as it disappeared under a plume of black and white smoke.
A local who filmed the destruction said: "The lava's heading in the direction of those homes and is going to eat them up. All the properties in the area below this road the lava is crossing at the moment are going to disappear."
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