Either decision would be fine, but putting laundry on an interior wall is just asking for trouble down the line. Dryer vents need to be as short as possible and directly vented to the exterior. Otherwise, you get clogs and a huge safety hazard. And your dryer stops working and you pull out lint balls the size of a poodle. And you're lucky to not have a house fire. I've seen dryer vents through a concrete foundation where moisture collected and made a complet sodden mass with the lint. The homeowner had to abandon that vent and just have ductwork running straight through the master bathroom to the exterior. IT was ugly, and if the laundry room had been sited better, it wouldn't have been necessary. I've also seen dryers vented straight up through the roof where all of the lint falls backwards and clogs it up for an amazing height. Dryer venting is usually an afterthought in most homes. Until there is a problem with it. Which there usually is when a dryer is sited too far from the exterior without a straight vent run. With Jenny's variation, at least you could make the WC wall thicker and run the dryer vent through that to the exterior. You will need to remember that a 4" rigid duct is required and that really won't fit into a 2x6 framed wall and leave any structural integrity left. So, either a 2x8 wall or a small soffit of some sort will be needed.

O.K., I figured out how to resize a picture and have posted an updated version of the floor plan. We live in North Dakota. We're trying to take advantage of natural light from the South and West and reduce window exposure on the North side of the house. We're building on three acres, so have plenty of room to the North (300 ft to road) and a large back yard. Our idea is to have all our outside activity stretch from patio doors onto a patio in the back yard. I tried "sliding the kitchen to the back wall and entering MBR through the hall again, but then the MBR doesn't really feel right this way. If we would have added just 3-4 ft onto the MBR, then it would have worked. I like the way things are arranged now, but it could have been tweaked a bit more before getting to the framing stage. The kitchen does have natural light coming from the South, West, and North throughout the day. We have patio doors on the South side of the house, large picture window on the West, and two windows bringing in light from the North (pass-through on North side of kitchen should bring light in from dining room picture window and smaller window in foyer. We're going to shorten wall in foyer to three feet, so it will open things up a bit. One drawback with having the stairwell open is the lack of wall space. Anyone have any opinions?

How much will this cost? Is it worth it to you? The W/D closet needs hook-ups, a vent, new machines maybe (so $5k?) and the the cost of a new small bathroom (20-25K?, sink you have plumbing going there). (btw, have you laid out the new bathroom to see where things will go? It could be a tight fit. You need 30" for the toilet. So if you put it and the shower where the W/D are today, you have a 30" wide shower, which might feel tight) I'm guessing you and your spouse will use the suite on the third floor and the rest of the rooms are for visitors: family and friends. There is another full bathroom on the first floor, so people can use that if there is crunch time getting ready. Only you can decide if it's worth it to you. Or you could spend the money on...many other things (or invest it, so you can retire sooner and spend more time in your vacay home??? ;)

We've had w/d in the master bath for 22 years. We love it. No negative issues. We do have an exhaust fan in the bathroom. The moisture in the room is vented outside and has not corroded our appliances. This is an add-on master bath we built and had all inspections done and passed. I don't remember it being a hurdle to clear, but maybe the building codes have changed since then. We have exhaust to outside dryer. We used to have Fridgeidaire/Electolux dryer in place, no heat added to the room. Now we have Hotpoint/GE dryer and it does add heat to the room. This is welcome in the winter, but in the summer it can make a warm room a bit hot as suezebell mentions. (we don't have A/C) The heat issue probably depends on the dryer itself. All the dryers I've had in my life have added heat to a room, except for the Fridgedaire/Electrolux model.