Interior housing is instance based and shares the same data center server as all instance content in the game; dungeons, raids, trails, story battles, etc...
Wards are world server based and share only that worlds content.
Back when housing first launched we had issues with dungeon lag and random disconnects, why you now return to the wards front door rather than the interior of the house. You can imagine the issues if everyone had their own personal mansion, with their own personal design, clogging up the instance server. Think 4.0 launch and those dreaded solo instance fights that stop everyone from progressing.



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The issue with instancing wards that I can see is that they're so large and they'd have to spin up anytime anyone teleports to their house, or logs in at their house, as you appear outside (in the ward). If you have to spin up an entire ward often enough, then shut it down and persist it, then spin it up again, it could wind up being worse than leaving it in memory all the time. Instance startup/shutdown isn't free in terms of server utilization either.

