Preheat the oven to 350°F. Line a 9×5-inch loaf pan with parchment paper or spray with nonstick spray.
In a medium bowl, toss together the apples, brown sugar, and 1/2 teaspoon cinnamon. Set aside.
In a separate large bowl, whisk together the flour, cinnamon, nutmeg, baking powder, baking soda, and salt. Set aside.
In the bowl of a stand mixer fitted with a paddle attachment, beat the butter until creamy, about 2 minutes.
Add granulated sugar and beat together for another 2 minutes, until well combined, smooth, and creamy.
Beat in the eggs until just combined.
Beat in the applesauce and vanilla extract until combined.*
Gradually add half of the dry ingredients into the wet ingredients and mix just until combined, then lower the mixer to low speed and slowly pour in the milk while the mixer is still running. Beat just until combined.
Then add the remaining dry ingredients and beat just until combined; do not overmix!
Pour about 1/2 of the batter into the bottom of the prepared loaf pan. Use a silicone spatula to spread out the batter to the edges and corners.
Spoon the apple mixture on top and spread out evenly.
Pour the remaining batter on top and gently use a silicone spatula to spread the batter out to the edges and corners.
Bake at 350°F for for 60-75 minutes. After about 30 minutes, you can loosely cover with aluminum foil to help prevent the top from getting too brown.
The bread is done with a toothpick inserted into the center of the bread comes out clean. This can take anywhere from 60 to 75 minutes, so be sure to check on it regularly for doneness after one hour.
Once fully baked, remove from the oven and allow to cool in the pan for 5-10 minutes before transferring to a cooling rack to cool completely. Once cooled, slice and serve.
Notes
Makes 1 loaf*Note: Before adding the dry ingredients to the wet ingredients, the batter will be wet chunky, almost looking like it is curdled. No worries! This is how it is supposed to look at this stage.Make sure the bread is cooled before slicing; warm bread may crumble apart if you try to slice it before it has cooled.Storage: Store bread in an airtight container at room temperature for up to 2 days or in the refrigerator for up to 1 week.Adapted from Sally's Baking