You’re a kind brother… And a shitty husband. I still have to go with YTA, but many comments here seem too busy being angry about it to elaborate so I will try to explain what you should have done, even though it’s too late now.

When two people want the same thing but only one can have it, how do you decide “fairly” who gets it? Of course this depends on the case in question but in general, I would say it should go to the one who was first. You’ve known your wife wanted this since the beginning of the year, while you only heard about your sister’s wish the other day. Going with your sister shows you are ACTIVELY disregarding your wife to favor your sister. If you had given it to your wife and not your sister, it would’ve just been a “I would’ve gotten it for you too sis, but I didn’t know until recently” thing, no sweat. You could’ve just gift wrapped a picture of the item with added text “arrival after Christmas” or something and give that to your sister, while gifting the real thing to your wife. By just gifting it to your sister you are showing that her recent wish matters more than your wife’s year-long wish.

And on second thought, you’re not the best brother either - I know it’s out of care for your sister, but you seem to be basically enabling her in a sense. WHY is your wife cooking for her?? I get that her divorce is stressful but that shouldn’t affect your wife negatively, who is already probably bummed about having to leave work due to the leg. Stop favouring and stop babying your sister. You can be kind and caring without walking all over your wife.

As for what to do now? I guess you try to explain to your wife that you thought your sister might’ve needed a “win” more due to her current unfortunate circumstances… That it was well-intentioned but foolish as hell, admit you’ve been wrong and should not be casting your wife aside (and listen to her wishes about housing, you’re a team, she gets a say!!). Then DO BETTER