We wrote yesterday that we think the bottom is NOT in for Florida real estate. This view is bolstered by the fact that mortgage rates are spiking up fast.

This will put the brakes on refinancing and any broader real estate recovery. As our friends at the Stansberry & Associates Investment Research noted on Thursday:

Yesterday [Wednesday], the rate of 30-year fixed-rate mortgages hit 5.79%, up from 5% two weeks ago, and lending activity has already fallen off a cliff. Advisory firm FTN Financial says the jump in rates will cut the number of borrowers with an incentive to refinance (generally rates 1.5% to 2% below your current rate constitutes “incentive”) in half. JPMorgan, the third-largest mortgage originator this year, said refinance activity is already “really down” since rates started rising, and noted 4.75% “seemed to be the switch” that spurred activity.The Mortgage Bankers Association (MBA) says refinancing activity is at its lowest level since last November.

Accounting for the two-week increase in mortgage rates, the average homebuyer will pay $100 more per month, about $36,000 over the 30-year life of the mortgage, on a $200,000 loan. Mortgage loan application volume is already down 7.2% from a week earlier.

Meanwhile, a tsunami of losses is gaining strength in the commercial real estate sector. We’ve been banging the drum about the coming catastrophe in commercial real estate. It’s only a matter of time before this becomes reality.

One big problem is the $179 billion in so-called partial-interest only loans that were written between 2005 and 2007 and packaged into bonds. These allowed owners to delay paying principal for the first several years of the loan. Now these principals are coming due. This from Bloomberg:

With soaring vacancies and falling rents, some cash-strapped borrowers will fail to cover the higher costs, said Andy Day, a commercial mortgage-backed securities analyst at Morgan Stanley in New York. About 87 percent of mortgages sold as securities in 2007 allowed owners to put off paying principal for several years or until maturity, compared with 48 percent in 2004, Morgan Stanley data show.

“The worst is yet to come,” MetLife Inc. Chief Investment Officer Steven Kandarian said yesterday in a Bloomberg Television interview. “Typically there’s a lag between when the economy softens and when the defaults actually occur.”

“Investors have already seen prices on top-rated senior debt drop below 70 cents on the dollar from 95 cents a year ago,” according to Aaron Bryson, a commercial mortgage-backed securities analyst at Barclays Capital in New York.