I don't always buy the argument "they will just go and do it somewhere else". I sometimes think, depending on the maturity of the individual teens involved, that it is sometimes beneficial to teens, especially teen girls, to put a barrier in place and whilst not banning it outright, not making it easy for them either.
Just because its legal for them to have sex, it's not always an optimum situation, and there can be a world of difference between the maturity of a just turned 17 year old and a nearly 19 year old.
I also think teen girls in particular are under a lot of pressure to have sex from bfs, and I think a lot of them are not confident enough in themselves or their bodies to speak up about where their boundaries lie in a sexual relationship. Also, a lot of them are looking for love and acceptance whereas many lads are more focused on shagging basically. Sorry if that's horribly sexist, this doesn't apply to all boys of course, but I think a lot of teen girls are somehow conditioned to "act cool" as if they don't care when underneath their emotions are all over the place.
That's just my opinion. I'm with your DH on this one op. I wouldn't be comfortable at all in my home if my 17 year old dd was upstairs having sex with her bf, especially if there was a younger sibling in the house. There's plenty of time for my DD to be exploring that side of her life in the privacy of her own accommodation at uni. I'm happy that she is focused on her female friends atm and the strong bonds she has developed within her friendship group, and on her studies, and while she enjoys spending time with her bf , he is not the main focus of her life.