Carolyn Haywood, author and illustrator, Betsy and Billy, 1941.The older sister is Betsy, and she's the protagonist of the Betsy series by author/illustrator Carolyn Haywood.
In Betsy's Little Star, Star is ready for kindergarten. Not that I've ever read this series, but I'm guessing it's either this title, about Betsy and her little sister Star, or one before it, since Star is 4 years old in this one. Betsy tells her mother that what she wants for Christmas is a baby sister. This is approximately book six in a series of Betsy books.The children are all crabby about this until they discover a trunk in the attic containg craft materials and they make all their own presents since they can't go out and buy.
Probably one of the many fans of the books will pin it down! There are several titles, and I have no idea which one has Star's birth in it, but it seems that Betsy's baby sister arrived at Christmas and was therefore named Star.
Looking for book I read around 1977, young adult - family celebrating Christmas gets snowed in and another family has to stay with them.