How does science explain ghosts?

Simply hypnagogic / hypnopompic effects.

Under some (very common) conditions someone's brain can be partly asleep [and dreaming] while another part is awake and aware.

The dream images can then be seen "floating" over what they are really seeing.

That's why one of the commonest ghost sighting locations is a bedroom or "the foot of the bed" and why the supposed ghosts fade out, as the person fully wakes up and the dream ends.

Another common one is after people have moved to a different house - and are not used to the sounds it makes, so their sleep is disturbed.

A similar half awake half asleep effect causes sleep paralysis & the two can happen separately or at the same time. That's the source of the mythical "held down" by ghosts or demons stuff.

So, people can honestly "see ghosts" (or what they believe are ghost sightings), but it's entirely an effect within their own brain.

Nowadays with TV and movies, the "ghost images" are as likely to be of someone favourite band or bits from some soap opera, or whatever they happen to dream about. It tends to bring a bit of reality to the experience...