The people suddenly realize that there's a holiday they should be celebrating in the seventh month, and conveniently it just happens to be the seventh month (Nehemiah 8:13-18). The holiday is Sukkot or The Festival of Booths, and it lasts seven days.
Sukkot is a festival honoring the time the Israelites spent in the wilderness during their journey to the Promised Land, dwelling in fragile booths. To the present day, observant Jews still build booths in their backyards, where they eat meals and sometimes sleep for the duration of the holiday. In this case, it's fitting that the returned exiles should suddenly rediscover Sukkot. They're coming out of an exodus of their own, an escape from Babylon. So there's a definite symbolic symmetry present in celebrating this festival for the first time since the days of Joshua.