Preheat oven to 350°F (175°C) and grease a 9×9-inch square baking pan. Line with parchment paper.
In a medium bowl, whisk together 1½ cups flour, baking powder, baking soda, ½ teaspoon cinnamon, and ¼ teaspoon salt. Set aside.
In a large bowl, cream softened butter and 1 cup granulated sugar with electric mixer for 2-3 minutes until light and fluffy.
Add eggs one at a time, beating well after each addition. Stir in vanilla extract.
Alternate adding dry ingredients and sour cream to butter mixture, starting and ending with dry ingredients. Mix just until combined.
Gently fold in diced apples until evenly distributed throughout batter.
In separate bowl, combine 1 cup flour, 1 teaspoon cinnamon, ¼ teaspoon salt, brown sugar, and ¼ cup granulated sugar. Add cold butter cubes and mix with pastry cutter until mixture resembles coarse crumbs.
Spread cake batter in prepared pan and evenly sprinkle crumb topping over surface.
Bake for 55-65 minutes until golden brown and toothpick inserted in center comes out with few moist crumbs.
Cool in pan for 15-20 minutes, then transfer to wire rack to cool completely.
In small saucepan, melt 1 tablespoon butter over medium heat. Stir in ½ cup brown sugar, 1 teaspoon cinnamon, milk, and pinch of salt. Cook 2-3 minutes until smooth.
Drizzle warm cinnamon sauce over cooled cake before serving.
Notes
Use Granny Smith apples for best results – their tartness balances the sweetness and they hold their shape during baking.
Keep butter cold for crumb topping to achieve the best texture. Don’t overmix cake batter to avoid dense texture.
Cake can be stored at room temperature for up to 4 days in airtight container. Drizzle can be stored separately in refrigerator for up to 1 week.