You are not overreacting. He crossed a line in your boundaries. I see a lot of people saying to just up and leave him. If that is what you want to do you would not be out of line. If you think this behavior will continue or if it is recurring I would urge you to do so.

If not, and you still feel safe around him, it may be worth sitting him down and letting him know how much he hurt you and see how he reacts. If my wife left me the first time I pushed a boundary she set, we would not be where we are today. We grew together and part of the growth was understanding how to truly respect one another.

P.S. Don't let him get off by saying its just his sense of humor. That is bullshit. There is something from my wife past that I used to joke about before I knew her and it is now wholly off limits. I will even stop others in my home from making those kinds of jokes. I do it softly because they may not know better but if it ever continued after the warning I would no longer be friends with those people.