Angela, it sounds as though your daughter has a good dose of “Second Child Syndrome.” One of the developmental myths that won’t go away is that younger children have a developmental advantage “because they learn from the older children.” For the most part, it doesn’t seem to work that way. Children learn to talk mainly by being talked to by adults.
Now I grant you that your daughter’s situation is a bit different from what I am describing, in that her sister is 6 years older and is probably not often competing for and getting your attention when the little one wants it. But it does sound as though she has people two people talking for her – your husband and your daughter. They should avoid doing that, but not so abruptly or completely that she becomes frustrated and afraid to try to talk.
On this website I have a number of articles describing things parents can do to facilitate language development. I encourage you to read some of those. In the meantime, read simple books to her in a warm and cozy setting. When she tries to tell you something she wants and you can’t understand her, ask her to help you by pointing. Then, when you are certain what it is, repeat what you think she was trying to say in a matter-of-fact manner. “Oh, you want me to help you find your corn popper. I can do that.” Try not to show any anxiety about her language functioning when you talk to her. For her to become overly anxious about talking at her age is one of the worst things that can happen to language development.
Our parenting advice is given as suggestions only. We recommend you also consult your healthcare provider, and urge you to contact them immediately if your question is urgent or about a medical condition.