I have an 18-month-old daughter and a 6-month-old son. Until my son was born, my daughter was learning new words all the time, but now it seems that she has gone back to "baby talk." I am very concerned about this toddler regression. Do you think a playgroup or being around children would help to develop her speech?
What you are seeing in your toddler is most likely a temporary regression of her development in response to the stress of having her family forever changed. If you think of development as a set of uneven stairs that children climb as they add on new skills, most children progress forward in a predictable sequence. But it's possible to take a step backward as well, usually when stressed. Even if the stress is essentially a good change, it is still stress (as you know from having two children). In a way, she is trying to compete with her baby brother on his turf.
At this point this behavior in an 18-month-old child is probably neither permanent nor worrisome. The best approach for you is to not get angry or appear frustrated, but to encourage her to be the "big girl." Reward her for using her language skills and give her praise as the older sister. A play group with a chance to be around her peers will help model more appropriate language skills. If this behavior persists for many more weeks, however, or if other areas of her development seem thrown off, a consultation with your doctor is warranted.