Using a hand mixer or stand mixer fitted with the paddle attachment, cream the softened butter and white sugar together until smooth.
Add the sour cream and mix until combined.
In a separate bowl, whisk together the eggs and buttermilk. Stir in the vanilla extract.
In another bowl, whisk together the flour, baking powder, salt, and nutmeg.
Alternately add the wet and dry ingredients to the butter mixture, beginning and ending with the dry ingredients. Mix just until combined. Do not overmix.
Grease a 9x9-inch baking pan. For easier removal, line the pan with parchment paper, leaving some overhang.
Pour half of the cake batter into the prepared pan and gently spread into an even layer.
Sprinkle half of the cinnamon streusel evenly over the batter.
Spoon the remaining batter over the streusel and gently spread it out.
Sprinkle the remaining streusel mixture evenly over the top.
Bake at 350°F for30 minutes, or until a toothpick inserted into the center comes out clean or with a few moist crumbs.
Place the pan on a wire rack and allow the cake to cool before slicing.
Optional Blueberry Variation
Add 1 cup fresh or frozen blueberries over the first layer of batter along with the middle layer of streusel. If using frozen blueberries, the cake may require additional baking time.