Ole Gunnar Solskjaer has overseen the departures of high-profile names such as Romelu Lukaku, Alexis Sanchez and Ander Herrera, while investing heavily in young, British talent.
However, the Red Devils have struggled at the start of the campaign and find themselves 10th in the Premier League table, 12 points off league leaders Liverpool.
And Owen believes the squad is one of the poorest the club has seen in a long time, owing partly to Solskjaer’s efforts to rebuild the side.
"Yes, I'd say [Manchester United are now a mid-table team]. I don't think they'll be top six this season, personally,” Owen said on BT Sport.
"Top half I think is likely, but just the fact we're having this conversation is the worry, isn't it?
"This has got to be the worst Manchester United team for decades, hasn't it? Since before Sir Alex Ferguson took over.
"It's been happening for a few years. For maybe five, six, seven, eight years you've been thinking 'it can't get any worse', and it has.
"The point that I'd like to make is that in many ways, Ole Gunnar Solskjaer has knowingly weakened his team.
"Getting rid of people like Lukaku, Herrera, [Matteo] Darmian, Sanchez, [Chris] Smalling. He knows he could improve his team with those players, but I think he's taken the view that you've got to take a couple of steps backwards to then move forwards.
"He's done that on purpose thinking, 'right, we've just got to rid ourselves of players that, OK they're probably better than what we've got, but are they going to take us to where we want to go?'
"That answer is no, then you're almost starting from scratch and I think that's what Ole Gunnar Solskjaer has done."