Anytime a child loses or stops using a skill they've already acquired, it's a concern.
He probably needs to be evaluated by a speech therapist.
With the new baby, he could be regressing a little bit. But you should probably get him checked out, just to find out if there is an underlying cause. I have a cousin who wasn't speaking as of almost 3, so his parents took him to get a hearing test. His hearing was fine, but the doctor referred them to another specialist. They found out that he is autistic. However, unlike your son, he hadn't spoken at all, not one word, he only babbled. I would say a specialist is a good idea. Maybe hearing and speech first, and go from there. Good luck!
Start with your pediatrician. Get a referral. You may need a speech evaluation, you may want to press for an appointment with a developmental pediatrician.
I know you say he meets all other benchmarks, but does he have any "quirks"? Many parents and pediatricians miss early warning signs because standard benchmarks are met. Some of these "quirks" that may be warning signs are sensitivities to light, sound, etc... Refusal to wear certain articles of clothing, refusal to touch certain textures or get dirty, etc.
I don't know if you are in the US, but you may also be able to get a free evaluation (and if necessary services) through your school district's early intervention program. I know a few people who receive(d) services for their children due to speech and language delays. While these children are/did receive special services as preschoolers, they are anticipated or have been mainstreamed as kindergarteners. Many parents fear a label. At this age, "labels" don't stick. I know of many children who have been un-classified because they received the services they needed early on and it helped them overcome their difficulties.
It is very possible that everything is OK. It's a very good sign that he is affectionate and follows directions. But since you have seen regression and a loss of speech and language, I would go forward with an evaluation. Best of luck and don't panic. Even *if* something is wrong, early intervention does wonders. You may have to be pushy to get what he needs though. Some may dismiss your concerns. Be his advocate and don't stop until you are satisfied with what you are hearing.
You may also contact your county's birth-3 services for help with evaluation and possible therapy.