After a 2-2 draw at Tannadice in the first-leg last week, United were encouraged when Dinamo remained at the bottom of the Russian Premier League after losing 4-0 to city rivals Spartak on Sunday, a result which ended Sergei Silkin's tenure as boss with Dmitri Khokhlov taking over as caretaker manager.
However, the former Russia international saw his new charges get off to the perfect start when Marko Lomic swung a low cross in from the left for Igor Semshov to rifle past Cierzniak.
Alexsandr Kokorin headed in the second after 22 minutes before midfielder Artur Yusupov ended any Tayside hopes before the break when he raced clear of the visiting defence to slip the ball past United's Polish keeper Radoslaw Cierzniak. Two late goals by substitute Aleksandr Sapeta completed a miserable night for the visitors.
"We had the worst possible start, losing a goal after two minutes against a very good side," Houston said.
"I said last night it works both ways from a change of manager and Dinamo played well for their new coach. They were just too strong for us physically and I was disappointed about the first-half when we didn't believe in ourselves. We should have done better than we did.
"But I have to put things into perspective with the wealth and experience of the Russian side. We have a very, very young team. If we can keep this team together for the next couple of years we will be able to build and learn from the European experience."
Houston insists his side's paid dearly for giving the Russians "too much respect" at the start of the game.
"I was very frustrated by the fact that the players stood in their own box and watched the cross coming in and I think it was due to the fact that we are naive and inexperienced in Europe," the Scotland assistant continued.
"As I said, we are very, very young and I think we gave opponents too much respect from the start. Dinamo are a very good side, good passers and very quick but I was disappointed with the fact that our players didn't challenge them in the penalty area for the goals."