That does seem a little soon, although you have to be flattered that he wants to introduce you to them. But yes, I'm with you: keep the horse in front of the cart. You are kind to be concerned with his feelings.
How big a deal is he making of you meeting them? Is it a special dinner for the purpose of meeting them, or does he just want to take you along on a casual family outing? Those are two very different things, although it doesn't really matter: if you're not ready, then you're not ready.
Unfortunately, there's probably no way to tell him without hurting his feelings at least a little bit, because he will likely see it as a sign that you don't like him as much as he likes you. Guys can be sensitive about things like introducing you to their families: they think it's a great honor, and your reluctance feels like a slap in the face. He might also take it to mean that you see no future in the relationship, even though that doesn't sound like the case here.
I would just assure him that you like him and really enjoy the time you guys have together, but that you want to take it slowly and get to know each other better before bringing family into it. It doesn't mean you see no future with him, and it doesn't mean that you won't want to meet his folks later on. But for now, you want to keep things simple and not mess up what you have by rushing things.
I bet he'll be able to handle that.