I'm writing a letter to the German family that will be hosting me over the summer, and am wondering if I should refer to them as "Sie" or "ihr"? If I was only talking to my host sister would that be different than speaking to her whole family (would I refer to her as "Sie" or "du")? Thanks!
I'd say that if this is the initial letter you're writing, I'd certainly go for the formal version when addressing the parents and for the informal version when addressing the kids. You can refer to the entire family as ihr, which reduces the degree of formality a bit, but not as much as addressing everybody informally.
For following letters, I'd decide depending on the reaction. If in doubt, stay with the formal version until you actually meet them in person - then they will tell you whether you can call them by their first name or not :-)
Liebe Frau [Lastname], lieber Herr [Lastname], liebe [Firstname],
ich freue mich schon sehr auf meinen Aufenthalt bei Euch. ...
This can be quite long if your host sister has many siblings. In that case I would write:
Liebe Famile [Lastname],
If you address a certain person in your letter, I'd go for the formal/informal version as described above.
I am certainly old fashioned (probably more of the parents generation), but I have been an exchange student in a similar situation. I was spared the decision as I was going the other way - my hosting country was the US.
Talking to the parents, I would go for the formal version. It shows respect and leaves the choice to the ones it belongs. They most probably will clear the situation in their response. Talking to the host sister, I would go informal, as I guess you are of somewhat comparable age.
You can surely address the issue in your letter, if you like. They will be positively surprised that you write in German (unless they already know, of course), and it can be breaking ground if you ask them, telling them that you are not sure.
I hope you have a great experience!