United have agreed to sign the Colombian striker, who joined AS Monaco for £50m, on a one-year loan deal worth £6m.
Owen believes the signing is the biggest of the summer, but also said United need reinforcements in other areas of the pitch.
“Best signing of the window? Obviously, Falcao sticks out and I am a fan of the striker, but I didn’t think it was the position United needed to strengthen,” Owen told Sportlobster.com.
Owen, who played under Sir Alex Ferguson for three years, said current boss Louis Van Gaal should have focused on defensive-minded players, but also admitted there is a lack of such footballers who fit the bill.
Owen added: “I think United needed to strengthen defensively, but the players just aren’t available at the moment.
“People say Ron Vlaar at Aston Villa, but no-one rated him until the World Cup and so I am not convinced.
“I think the three in defence isn’t working at the minute and so, if I was Van Gaal, I would go back to four in defence.”
Falcao is United’s second attacking signing after Angel Di Maria, whose £59.7million move from Real Madrid broke the British transfer record.
Falcao joins the Argentine along with Juan Mata, Wayne Rooney, Adnan Januzaj and Robin van Persie as attacking options, but Owen believes the area may be over-crowded.
He said: “United now have so many attacking players that I am unsure how they are going to fit them all in.
“I think this is why they originally started with the 3-5-2 formation, so they could accommodate loads of attackers, but now I think Van Gaal may sacrifice Mata.”
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