AirTag lost mode not working

I just purchased my first AirTag yesterday to put on my cat who likes to wander, and set it up according to the instructions. He isn’t home today, so I have opened the Find My app and activated lost mode to try locate which neighbouring house he is at, and the item is showing as currently at my address. It also isn’t offering the maps link to follow any directions to him, and when I tap on Find Nearby it says searching for signal and move to different location. I know he isn’t in my yard and is likely a few houses away. Anyone know why this isn’t working? It can’t be the battery as it’s a brand new AirTag. Also I’m running current version of iOS on iPhone 12.

Many thanks.