Sorry about that - I have two "adult" children - 22 and 18. I put "adult" in quotes because depending on the individual, although legally considered an adult, 18 -25 years old their mind is still that as an adultescent - average age of having a more adult mind is 21 -22; of course boys tend to mentally mature at an older age. This is coming from an experienced counselor.
Any way - I think your instincts are correct. He is making a bad decision and you will push him away if you come across the wrong way. Although a completely different situation - I have and still am to a certain extent dealing with a young adult making bad decisions. As a parent you want to protect your child no matter their age. As a young adult, your son wants to be independent and feels he is an adult. It is an explosive situation.
We did meet with a family counselor - and basically said about what I wrote above. We made compromises - she was to tell us where she was and check in with us - counselor made it clear that parents need to know their child is safe, but we had to give her room - room to make her own mistakes and decisions but while we had some comfort she was safe.
Of course your situation is different. My child is still at home at the moment and her decisions are not quite as severe as his seem to be. However, it seems the premise is the same.
He is an adult - is at your home now? If so, I think maybe working out some sort of compromise - one that you both can deal with and be respectful of one another. I know you would not want him moving in with her so hopefully by making a compromise you will have some influence over him. First off - is there a reason he is not working? If he is not a student and he does not have a reason to not work, is there a positive way you can get him to go get a job? As far as going out and partying - you have little control over that other than not allowing it in your house. If he is at home, tell him you as a parent need to know he is safe. You love him and want to ensure this. If/when he goes out - that he lets you know when he will be out and when he plans on coming home and if this changes just to update you. That is fair as if he doesn't arrive by next morning and he is just crashing over a friend's house - he doesn't want you calling the police, hospitals and everyone he knows.
I do not think you are overreacting - you care and love your son and you know he is making bad decisions. But and this is hard I know because I am going through some of this - he might just need to make these mistakes to learn from them. Let him know you love him and care for him and will be there for him. Have rules in your home - that are reasonable and shows mutual respect. Let him know that you will respect (although not agree - that is ok to not agree with his decisions) his choices as long as they are legal, but he needs to respect yours as well. If they are reasonable on both sides he may not like yours either but you are more likely to get buy in.
I think the more you show you respect him (maybe not agree) the more influence you may have on things like encouraging a job - i.e. if you get a job you would be able to buy a car of your own...point out the positives.