One of the toughest parts of hosting is having the cojones to be honest and professional. This is an opportunity for you to grow as a person as well as a host. I struggle with it all the time - but we have to embrace it to become better at this job.
If you were in his shoes, and we are all in those shoes at some point in our lives, right? When we’ve goofed or offended but the people don’t have the kindness to be honest with us? Wouldn’t you just want to be told:
"I’m very uncomfortable renting to a large group of young men. I apologize for not being very clear immediately. I assumed when you read my strict rules you would choose to not book my home. I’ve had several bad experiences with groups of young men, and learned that large groups of young adult men = parties which means damage to my property and problems with my neighbors. The damage is expensive, yes, but worse, it is time consuming and can force me to cancel future bookings. No security deposit can cover me for the wear and tear on me as I run around having to get repairs made.
As such I’m not able to take the risk of renting to your group. I hope you find a great place and have a great weekend, and again apologize for not informing you promptly"
Don’t make up a story about renting only to families (and posts on here will prove that that is hardly fail-safe, or the dates, or whatever crap. We owe it to our guests to be upfront and honest.